Study Examines the Performance of New Businesses Owned by Recent Immigrants

A joint study by the Telfer School and Industry Canada found that young immigrant-owned exporter firms outperformed young firms owned by non-immigrants, suggesting that immigrants do indeed have resources (for example, access to international networks) to give themselves a competitive advantage over non-immigrant owners that export.

But not all immigrant business owners can avail themselves of such advantages, and in fact, the second finding of the study was that firms founded by immigrants who did not export underperformed, on average, all other firm categories. That outcome appeared to be tied to immigrant entrepreneurs’ sense of being left to compete in a new setting while lacking networks and track records.

These findings might encourage policymakers to consider yet more effective ways to stimulate international trade among SMEs—and immigrant-owned enterprises in particular, the researchers say.

Francois Neville (a recent Telfer M.Sc. graduate now a doctoral student at Georgia State University), Professors Barbara Orser and Allan Riding of the Telfer School, and Owen Jung, a researcher at Industry Canada, drew on a large sample of Canadian business owners whose firms began trading between 2000 and 2004 and used taxation data to track 2004 to 2008 performance. The results were published online on December 29 in the Journal of Business Venturing. A related article in Small Business Quarterly, published by Industry Canada, can be viewed here [This link is no longer available].