Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 265: Growth in first- and second-generation immigrant firms in Sweden

Nedim Efendic (), Fredrik W. Andersson () and Karl Wennberg ()
Additional contact information
Nedim Efendic: Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-11383 Stockholm, Sweden
Fredrik W. Andersson: Statistics Sweden, Postal: Statistics Sweden, Klostergatan 23, SE-701 89 Örebro, Sweden
Karl Wennberg: Institute for Analytical Sociology (IAS) & Department of Management and Engineering Linköping University, Sweden and Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

Abstract: Despite the burgeoning literature on immigrant entrepreneurship, there is a dearth of research on the social and economic factors shaping the performance of immigrant-run firms. Drawing upon human and social capital theory and assimilation theory, we investigate differences in performance measured as revenue growth in a comparative study of native and immigrant CEOs. Following 50,002 small firms in Sweden over four years, we find distinct patterns in both firm size and revenue growth between firms managed by immigrants and by natives. While firms run by second-generation immigrants from OECD countries exhibit higher growth rates than natives, the reverse is true for second generation immigrants from non-OECD countries, suggesting that economic integration in terms of immigrants’ small business growth in Sweden is characterized by segmented rather than universal assimilation.

Keywords: Immigrant entrepreneurship; intergenerational differences; firm growth; Sweden

JEL-codes: J61; M13; O18

42 pages, December 23, 2015

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