Virginia Tech researcher explores the role of immigrant entrepreneurship

Immigration and entrepreneurship are two issues of frequent political and policy discussion in the United States. Chunbei Wang, associate professor in the College of Agriculture and Life Sciences’ Department of Agricultural and Applied Economics, has conducted research that sheds light on the intersection of these topics.

Immigration has grown significantly worldwide, reaching 281 million international migrants in 2020, according to the United Nations Department of Economic and Social Affairs. With this increase, the motivation for immigrant self-employment varies, with some choosing it as an alternative labor market choice to unemployment and possible discrimination in the wage sector and others as a profit opportunity and to be their own boss.

In the United States, immigrants are nearly twice as likely as natural-born citizens to become entrepreneurs, representing almost 30 percent of all new entrepreneurs.

“The factors that influence their entrepreneurship decisions are complex,” Wang said.

Wang said microeconomic factors such as education, language skills, and financial capital can facilitate business startups, while social factors such as customer or bank discrimination can deter self-employment. Macroeconomic influences such as business cycles or immigration policies can also play a role.

“Immigrants are known to have high business ownership rates in several major immigrant-receiving countries,” Wang said. “Their contributions to the economy have been highlighted in studies and used as a justification for pushing changes in immigration policies, so it is important to learn what factors determine their entrepreneurship decisions.”

Using nationally representative data sets, Wang and Magnus Lofstrom, policy director and senior fellow at the Public Policy Institute of California, provide information for policymakers seeking to understand the relationship between immigration and entrepreneurship.

Wang has also conducted research in understanding the surge in Hispanic immigrant business ownership in recent decades.

Read the full publications: “Immigrant Entrepreneurs” and “Immigration policy and the rise of self-employment among Mexican immigrants.”