Recent Research: New insights into immigrant entrepreneurship

A recent National Bureau of Economic Research (NBER) working paper, Immigrant Entrepreneurship: New Estimates and a Research Agenda provides fresh insights into the growth and characteristics of immigrant-founded firms across the United States. The study also outlines directions for future research in this field.

Key findings from the authors’ statistical analysis include:

• In a sample of 25 states, immigrants’ representation among top earners in new firms rose from 22.5% in 2003 to 28.9% in 2020.
• Nearly two-thirds of this growth came from a general rise in immigrant entrepreneurship across all regions in the sample rather than concentrated booms in specific states.
• The overall share of immigrant entrepreneurship increased from 18.7% in 2007 to 24.2% in 2019.

At the firm level, the study finds that immigrant-founded firms between 2014 and 2019 demonstrated higher rates of patenting compared to their native-founded counterparts. They are also more likely to produce new technologies and less likely to rely on existing ones. This pattern persists even when the authors account for factors such as the founders’ age, gender, and educational level (although they also noted that immigrant founders are 7.4 to 9.2% more likely to hold a STEM degree). The authors note that understanding the underlying mechanisms for this higher performance is an area in need of future research.

These findings align with insights from SSTI’s recent webinar on immigration pathways for technology-based economic development (TBED), which explores useful resources that support immigrant entrepreneurs. The webinar, featuring experts from U.S. Citizenship and Immigration Services (USCIS) and immigration law, highlighted multiple visa options beyond the H1-B, including O-1 visas and F-1 OPT, and discussed the new International Entrepreneur Rule, which allows founders of qualifying startups to remain in the country for up to five years.

Support mechanisms like university partnerships, including Global Entrepreneur-in-Residence programs, and government grants, such as SBIR awards, were also discussed as useful tools to help immigrant entrepreneurs establish and grow their businesses in the United States.

For more on this topic, read our previous articles about the role of immigrants in the U.S. innovation ecosystem and the impact of high-skilled immigrants on entrepreneurship.