The financing of immigrant-owned firms in Canada
- 108 Downloads
Using recent survey data, this paper examines access to financing by immigrant business owners. We hypothesize that immigrant and Canadian-born owners finance their businesses in significantly different ways and that immigrant-owned small and medium enterprises (SMEs) have more difficulty accessing financial capital. The results suggest that, after adjusting for firm and owner characteristics, financing sources for growth financing tend to be similar for the two groups. Although immigrant owners—notably those in Canada for more than 20 years—were less likely than Canadian-born owners to seek financing from any source, their applications were as likely to be approved. Both immigrant and Canadian-born owners reported that, among seven potential obstacles to firm growth presented in the survey, “access to financing” was the least important. The study finds only weak evidence to support the hypothesis that access to financial capital is a more serious issue among immigrant-owned SMEs than among SMEs with Canadian-born owners.
KeywordsBusiness ownership Immigrant entrepreneurs Business financing Financial capital
JEL classificationG32 L26 M21 M13
- Cole, R. and T. Sokolyk. 2017. Debt financing, survival, and growth of start-up firms. Journal of Corporate Finance, forthcoming ( https://doi.org/10.1016/j.jcorpfin.2017.10.013).
- Crepon, B. & Duguet, E. (2003). Bank loans, start-up subsidies and survival of the new firms: an econometric analysis at the entrepreneur level. University of Paris I Working Paper no. 2003.77.Google Scholar
- Fairlie, R.W. (2012). Immigrant entrepreneurs and small business owners, and their access to financial capital. Small Business Administration, 1–46.Google Scholar
- Fairlie, R.W. & Lofstrom, M. (2013). Immigration and entrepreneurship. IZA working paper no. 7669. Bonn, Germany.Google Scholar
- Gai, Y. & Minniti, M. (2010). Minority business start-up, survival and financing in the U.S. Babson Faculty Research Fund Working Papers, no. 66. Babson Park, Massachusetts: Babson College.Google Scholar
- Green, D., Liu, H., Ostrovsky, Y., Picot, G. (2016). Immigration, business ownership and employment in Canada. Analytical Studies Branch Research Paper Series, no. 375. Statistics Canada Catalogue no. 11F0019M. Ottawa: Statistics Canada.Google Scholar
- Imbens G., and D. Rubin. 2015. Causal inference for statistics, social, and biomedical sciences: an introduction. Cambridge University Press.Google Scholar
- Organisation for Economic Cooperation and Development (OECD) (2010). Open for business: migrant entrepreneurship in OECD countries. Improving Credit for Migrant Enterprises, chapter 15. Paris, France.Google Scholar
- Pearce, S. (2005). Today’s immigrant woman entrepreneur. The Diversity Factor, 13(3), 23–29.Google Scholar
- Toussaint-Comeau M. (2005). Self-employed immigrants: an analysis of recent data. Chicago Fed Letter no. 213, Federal Reserve Bank of Chicago.Google Scholar
- Tseng, Y. F. (1997). Ethnic resources as forms of social capital: a study on Chinese immigrant entrepreneurship in Los Angeles. Taiwanese Sociological Research, 1(3), 169–205.Google Scholar