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Transnational activities of immigrant-owned firms and their performances in the USA

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Abstract

Using microdata from the U.S. Survey of Business Owners 2007, this study examines transnational activities of immigrant-owned businesses in three aspects: Whether they export, outsource jobs, and have overseas establishments. Results show that immigrant-owned firms have significantly higher tendency to be involved in transnational economic activities when compared to non-immigrant-owned firms. Immigrant firms without transnational activities have significantly fewer employees, smaller annual total sales, and smaller total payrolls than non-immigrant firms. However, immigrant-owned firms with transnational activities fare significantly better than non-immigrant-owned firms without transnational activities. These findings speak directly to the long-debated issues concerning different motivations and performance outcomes of immigrant business ownership.

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Notes

  1. We understand that the owner’s function in a firm has multiple dimensions in addition to financial control. For example, the style and strategies of daily management significantly affect business operation and performance. Labor force recruitment, market information analyses, and forefront interaction with customers, which are especially important when dealing with transnational transactions, may not be executed by the owners who have the financial control but by the owners who manage day-to-day operations, who directly provide services or produce goods, or who perform other functions. Therefore, we test our results by defining a firm as an immigrant-owned firm once there is one foreign-born owner. Results from regression do not significantly differ from our current observation qualitatively.

  2. For the 2007 SBO, the primary method of disclosure avoidance is noise infusion in which values are perturbed prior to tabulation by applying a random noise multiplier to the magnitude data, such as these performance indicators (employment size, sales and payroll). Disclosure protection is accomplished in a manner that causes the vast majority of cell values to be perturbed by at most a few percentage points. In addition, the SBO 2007 public use microdata sample provides the performance indicators at the establishment level for each record.

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Authors and Affiliations

  1. Department of Geography and Earth Sciences, University of North Carolina Charlotte, 9201 University City Blvd, Charlotte, NC, 28223-0001, USA

    Qingfang Wang

  2. Andrew Young School of Policy Studies, Georgia State University, P.O. Box 3992, Atlanta, GA, 30302-3992, USA

    Cathy Yang Liu

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  1. Qingfang Wang
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Correspondence to Qingfang Wang.

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Wang, Q., Liu, C.Y. Transnational activities of immigrant-owned firms and their performances in the USA. Small Bus Econ 44, 345–359 (2015). https://doi.org/10.1007/s11187-014-9595-z

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