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Immigration causes American businesses to fail and that is a good thing

Ryan H Murphy (Southern Methodist University, Dallas, Texas, USA)
Rick Weber (Department of Economics, Farmingdale State College, Farmingdale, New York, USA)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Article publication date: 11 April 2016




The purpose of this paper is to investigate the relationship between immigration rates and business failure, where business failure is viewed as a proxy for the presence of entrepreneurship.


It employs a panel data approach to the USA, using the percentage of the population that is foreign born as the explanatory variable for the business failure rate ten years later.


The authors find the effect to be large, with a one standard deviation increase in the foreign born population corresponding to a 1.09 standard deviation increase in business failure rate, and the authors argue, entrepreneurship.


The effect the authors find is very large though perhaps also counterintuitive.



JEL Classification — F22, L26, R11

The authors thank Colin O’Reilly, Alex Nowrasteh, and Benjamin Powell for their helpful comments.


Murphy, R.H. and Weber, R. (2016), "Immigration causes American businesses to fail and that is a good thing", Journal of Entrepreneurship and Public Policy, Vol. 5 No. 1, pp. 63-72.



Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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