Immigration and entrepreneurship in Europe: cross-country evidence

This paper investigates the empirical link between migrations and entrepreneurship in European countries, for the first time drawing from a large sample of individuals sourced from the cross-country GEM survey. Specifically, the paper studies the impact of individuals' immigration status on entrepreneurial outcomes at all stages of the entrepreneurial process: interest in starting a new business, effectively starting, running a new business and managing an established company. The analysis uses a sequential probit model with sample selection to capture the dependence between entrepreneurial stages. It also distinguishes between different typologies of entrepreneurs (necessity and opportunity-driven, European and non-European; recent and long-standing immigrants). Additionally, it implements heteroscedasticity based instruments to address potential endogeneity issues. The study finds evidence that immigration has a positive effect on entrepreneurship. Immigrants are more willing to engage in entrepreneurship. Among those who started a new business, however, immigrants have lower chances than natives to succeed in the following stages of entrepreneurship.