The More the Merrier? Immigrant Share and Entrepreneurial Activities

Abstract

We examine the relationship between immigrant share and entrepreneurial activities in a country. Building on knowledge spillover theory of entrepreneurship (KSTE), we hypothesize that immigrant share positively relates to the creation, growth, and export activities of new firms through knowledge spillover between immigrant and native communities. We further suggest that favorable attitudes of natives toward immigrants positively moderate this relationship. Using data for 32 countries from the Global Entrepreneurship Monitor, we find support for the hypothesized direct relationships and for the moderating influence of a nation's attitude toward immigrants. Our study has implications for KSTE and research on entrepreneurship and immigration.