SURVIVAL OF NEW FIRMS OWNED BY NATIVES AND IMMIGRANTS IN NORWAY

Abstract

This paper investigates the survival rates of businesses founded by immigrants and natives in the context of Norway, which has not yet been explored. Based on the relevant literature review, the entrepreneur's human capital and venture's start-up characteristics were expected to explain the differences between the survival rates of businesses established by immigrants and natives. Longitudinal data on 389 firms established in 2002 were analyzed. It was revealed that the survival rate was lower for businesses established by immigrants compared to those established by natives. The analysis suggests that the relatively low survival rate of businesses established by immigrants is partly explained by the perceived novelty of the products and by the fact that immigrants are more likely to locate their businesses in urban areas. Human capital differences were not found to explain immigrant/native differences in business survival rates. Based on these results, several practical implications and suggestions for future research are offered.