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The Comparative Liberty-Dignity Context of Innovative Immigrant Entrepreneurship

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Abstract

This chapter combines the concept of “entrepreneurial alertness” (Kirzner in Competition and Entrepreneurship. University of Chicago Press, Chicago, 1978) with the bourgeois liberty and dignity perspective on modern growth (McCloskey in Bourgeois Dignity: Why Economics Can’t Explain the Modern World. University of Chicago Press, Chicago, 2011) to propose a comparative liberty-dignity framework for the allocation of creative (or innovative) immigrant entrepreneurship in the world. Assuming that both economic freedom and social honor matter, the conjecture is that the allocation of the global supply of creative entrepreneurs is a function of the relative differences across institutional and cultural contexts in the world and the differential payoffs associated with them. The direction of the flows of immigrant entrepreneurs is from countries with low degrees of liberty to countries with high degrees of liberty on the one side, and from cultures with low dignity to cultures with high dignity conferred to entrepreneurs, on the other side. Empirical illustrations, with net migration data from the World Bank and cultural-social data from the Global Entrepreneurship Monitor, are used to investigate the strength of the relationships in the comparative liberty-dignity conjecture. The data seem to support that creative immigrant entrepreneurs are more likely to migrate towards destinations with high degrees of economic freedom and societal support towards the novelties and opportunities they create.

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Fig. 6.1
Fig. 6.2

(Source Chart and calculations are based on data from The World Bank’s World Development Indicators [The World Bank 2019], and Hugo Montesinos [2019])

Fig. 6.3

(Source Calculations and illustration are based on data from The World Bank [2019], The Fraser Institute [Gwartney et al. 2016], and The Global Entrepreneurship Monitor [2018])

Notes

  1. 1.

    Following Schumpeter’s ideas, in this chapter I use the terms “creative” and “innovative” interchangeably. For example: the term “creative entrepreneur(s)” is not different from “innovative entrepreneur(s),” and “creative immigrant entrepreneur(s)” is not different from “innovative immigrant entrepreneur(s).”

  2. 2.

    For McCloskey’s full discussion and explanation of her formalized model of modern growth, see chapter 43, in McCloskey (2011).

  3. 3.

    The perceived payoffs do not necessarily need to be financial. They can also be social and cultural non-monetary payoffs.

  4. 4.

    I acknowledge the existence of measurement error and nuisances that are inevitable in empirical practice given the lack of precise data on foreign-born entrepreneurs and innovators.

  5. 5.

    The source of the net migration data is The World Bank Data (2019) and the United Nations (UN) Population Division, World Population Prospects: 2017 Revision (United Nations 2019).

  6. 6.

    Countries receiving numerous refugees due to political instability or armed conflict in neighboring countries have been purposefully excluded from the scatterplot in Fig. 6.2 to more accurately illustrate the relationship between net migration rates and economic institutions in normal times.

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Nicoara, O. (2021). The Comparative Liberty-Dignity Context of Innovative Immigrant Entrepreneurship. In: John, A., Thomas, D.W. (eds) Entrepreneurship and the Market Process. Mercatus Studies in Political and Social Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-42408-4_6

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