To Assimilate or Not to Assimilate? A Cross-country Study on Assimilating Entrepreneurial Tendencies

We study whether immigrants are more entrepreneurial than natives. More importantly, we analyze the motivations behind self-employment and how these motivations explain differences in entrepreneurial tendencies between natives, first-generation immigrants, and second-generation immigrants. We find immigrants to be generally more entrepreneurial, in terms of self-employment, than natives, and we find the difference to be largely driven by necessity motivation, or the inability to find jobs elsewhere. We also find evidence of cross-generational assimilation among immigrants in terms of entrepreneurial tendencies. Finally, necessity-motivated entrepreneurs who develop their business to the established stage are much more likely to be second-generation immigrants than natives or first-generation immigrants.