Immigrant Entrepreneurship Is More Than Starting a Business

Understanding immigrant entrepreneurship requires looking beyond business ownership to the knowledge, opportunities, networks, and institutions that shape entrepreneurial journeys.

When we hear the term immigrant entrepreneur, we often imagine someone who has moved to a new country and established a business. It might be a neighborhood grocery store, a restaurant, a construction company, or a technology startup. These businesses represent visible examples of immigrant entrepreneurship, but they tell only part of the story.

Behind every business is a process involving decisions, experiences, opportunities, and constraints. Some immigrants arrive with substantial professional knowledge or previous entrepreneurial experience. Others explore entrepreneurship after spending years in employment, developing local networks, or becoming familiar with a new economic environment.

Their motivations and circumstances can differ considerably.

Understanding immigrant entrepreneurship, therefore, requires more than counting immigrant-owned businesses or celebrating successful founders. It requires examining how individuals interact with the economic, social, and institutional environments in which entrepreneurship becomes possible.

Immigrant Entrepreneurship in the United States

Research demonstrates that immigrants make significant contributions to entrepreneurship in the United States.

Kerr and Kerr (2020), using the U.S. Census Bureau’s Survey of Business Owners for 2007 and 2012, found that first-generation immigrants accounted for approximately 25% of new businesses in their analysis. The share exceeded 40% in some states, including California and New York.

Their study also identified differences between immigrant-owned and native-owned firms in employment, employee benefits, industry composition, and international business activities.

Another important study by Azoulay and colleagues (2022), published in American Economic Review: Insights, examined immigrant entrepreneurship using U.S. administrative and other data. The researchers found that immigrant founders made substantial contributions to new business formation and employment creation, with particularly important roles in high-growth entrepreneurship.

These findings establish the economic relevance of immigrant entrepreneurship.

However, statistics about business creation do not necessarily explain why individuals pursue entrepreneurship, how they recognize opportunities, or what challenges they experience before and after establishing a business.

To understand these questions, we must look beyond business formation itself.

Different People, Different Entrepreneurial Journeys

Immigrant entrepreneurs should not be treated as a single, homogeneous group.

Their experiences may differ according to educational background, professional skills, financial resources, migration history, social relationships, and familiarity with the host country’s institutions.

Consider two hypothetical individuals.

The first has operated a business in another country and intends to establish a similar enterprise in the United States. This individual may possess valuable entrepreneurial experience but need to understand unfamiliar regulations, customer preferences, and business practices.

The second has never owned a business but develops an entrepreneurial idea after gaining professional experience in the United States. This individual may understand the local market but lack experience in business formation or financial planning.

Both may eventually become immigrant entrepreneurs, yet their learning needs, motivations, and available resources can be quite different.

Research supports this more nuanced perspective.

A review by Dabić and colleagues (2020), covering 514 academic articles, demonstrates the multidisciplinary nature of immigrant entrepreneurship research and highlights the importance of examining different theoretical, institutional, and geographic contexts.

Entrepreneurship among immigrants cannot be adequately explained by one motivation, one community characteristic, or one model of business development.

Entrepreneurial Opportunities Are Shaped by Their Environment

An entrepreneur’s personal determination is important, but individual effort does not operate independently of the surrounding environment.

Kloosterman’s (2010) mixed embeddedness approach provides a useful framework for understanding this relationship.

The approach connects three broad dimensions:

The resources and capabilities available to individuals.
The opportunities and conditions within local markets.
The wider institutional environment, including relevant rules and economic structures.

For example, an immigrant may have strong technical skills and experience managing businesses. Yet the entrepreneurial opportunities available may depend on local demand, industry requirements, competition, access to finance, and applicable regulations.

Two individuals with similar entrepreneurial abilities may therefore encounter very different opportunities in different locations or industries.

This perspective challenges explanations that attribute entrepreneurial outcomes entirely to personal ambition or cultural background.

It also reminds us that entrepreneurship takes place within a larger system of institutions, markets, and relationships.

The Role of Knowledge and Social Networks

Entrepreneurship requires more than recognizing an opportunity. Individuals must also gather information, evaluate decisions, establish relationships, and understand the environment in which they intend to operate.

For immigrant entrepreneurs, some of this knowledge may be unfamiliar, particularly when business systems differ between their countries of origin and residence.

Social networks can play an important role in navigating these differences.

Family members, friends, community organizations, professional contacts, and fellow entrepreneurs may provide information, encouragement, introductions, and other resources.

Connections within immigrant communities can be particularly valuable because they may offer shared language, familiarity, and experience.

However, community networks should not be viewed as a complete substitute for broader professional and institutional connections.

An entrepreneur may also need relationships with customers, suppliers, educational institutions, financial organizations, and other participants in the local business environment.

Access to different sources of knowledge matters because entrepreneurial decisions frequently involve information that no single individual or network possesses.

This suggests an important consideration for entrepreneurship development: improving information accessibility may be just as relevant as expanding the number of available support organizations.

A resource can exist without being easy to find, understand, or evaluate.

Institutional Conditions Can Enable or Restrict Entrepreneurship

Entrepreneurship is also shaped by institutional conditions.

Agarwal, Ganco, and Raffiee (2022), in Organization Science, examined how immigration-related employment constraints influence new venture formation among immigrants with science and engineering backgrounds in the United States.

Their research found that such constraints can discourage entrepreneurship as an early-career choice by limiting individuals’ employment options and affecting their career decisions.

The findings illustrate that entrepreneurial participation cannot always be explained solely by whether an individual possesses entrepreneurial motivation or capability.

More recently, Arora and colleagues (2025), writing in the Journal of Business Venturing, examined how immigrants’ educational backgrounds, home-country entrepreneurial cultures, and state-level institutional conditions interact in shaping entrepreneurship.

Their findings suggest that individual characteristics and institutional environments can combine in complex ways, creating different opportunities and constraints across immigrant groups.

These studies provide an important reminder: the desire to become an entrepreneur and the practical ability to pursue entrepreneurship are not necessarily the same.

Rethinking How We Understand Entrepreneurial Success

The public discussion of immigrant entrepreneurship frequently highlights exceptional success stories.

Large technology companies, high-growth startups, and prominent immigrant founders attract considerable attention. Their achievements are significant, but they do not represent every immigrant entrepreneurial experience.

Many immigrant-owned businesses operate in ordinary sectors of the economy, serving local customers and communities.

Others may remain small, change direction, or eventually close.

A more comprehensive understanding should therefore consider several dimensions of entrepreneurship, including business formation, sustainability, employment, innovation, individual economic circumstances, and the broader conditions influencing these outcomes.

It is also important to recognize that starting a business is not always the preferred or most suitable economic pathway for every immigrant.

Entrepreneurship can be one possible form of economic participation, rather than a universal measure of ambition, integration, or achievement.

Looking beyond successful business launches allows us to ask deeper questions about the entrepreneurial process itself.

Who has access to relevant information? Which institutional conditions affect participation? How do entrepreneurs develop networks? What happens after a business is established?

These questions may provide a more useful basis for research and informed discussion than business-formation statistics alone.

Toward a Broader Understanding of Immigrant Entrepreneurship

The research discussed here points toward a central conclusion: immigrant entrepreneurship is shaped by the interaction of people, resources, opportunities, relationships, and institutions.

It involves more than the act of registering or opening a business.

For researchers, this suggests the value of examining entrepreneurial journeys and the different environments in which they unfold.

For educational institutions and knowledge-sharing platforms, it raises questions about how entrepreneurship information can be made easier to discover and understand.

For policymakers and entrepreneurship ecosystem organizations, it highlights the importance of considering differences among immigrant communities and recognizing the institutional conditions that shape entrepreneurial participation.

These are not arguments that information access alone can resolve every entrepreneurial barrier. Financial constraints, regulatory conditions, market competition, and other factors remain relevant.

Rather, they suggest that entrepreneurship development should be approached as a multidimensional process.

Immigrant entrepreneurship is an important part of the American economic landscape, but its significance extends beyond the number of businesses immigrants establish.

Behind those businesses are individuals navigating opportunities, uncertainty, unfamiliar institutions, and changing economic environments.

Understanding their experiences requires moving beyond simplified narratives of success and examining the conditions that influence entrepreneurship before, during, and after business formation.

Immigrant entrepreneurship is not merely about starting a business. It is about understanding how entrepreneurial possibilities emerge, how individuals navigate them, and how the surrounding environment shapes their decisions.

A deeper understanding of these processes can contribute to more informed research, more accessible entrepreneurship knowledge, and better discussions about inclusion within entrepreneurial ecosystems.

References

Agarwal, R., Ganco, M., & Raffiee, J. (2022). Immigrant entrepreneurship: The effect of early career immigration constraints on new venture formation. Organization Science, 33(4), 1372–1395. https://doi.org/10.1287/orsc.2021.1485

Arora, P., Nagaraj, P., Bengoa, M., & Mukherjee, D. (2025). Immigrant entrepreneurship in the United States: Intersectionality as a blessing and a curse. Journal of Business Venturing, 40(4), 106501. https://doi.org/10.1016/j.jbusvent.2025.106501

Azoulay, P., Jones, B. F., Kim, J. D., & Miranda, J. (2022). Immigration and entrepreneurship in the United States. American Economic Review: Insights, 4(1), 71–88. https://doi.org/10.1257/aeri.20200588

Dabić, M., Vlačić, B., Paul, J., Dana, L.-P., Sahasranamam, S., & Glinka, B. (2020). Immigrant entrepreneurship: A review and research agenda. Journal of Business Research, 113, 25–38. https://doi.org/10.1016/j.jbusres.2020.03.013

Kerr, S. P., & Kerr, W. R. (2020). Immigrant entrepreneurship in America: Evidence from the Survey of Business Owners 2007 & 2012. Research Policy, 49(3), 103918. https://doi.org/10.1016/j.respol.2019.103918

Kloosterman, R. C. (2010). Matching opportunities with resources: A framework for analysing (migrant) entrepreneurship from a mixed embeddedness perspective. Entrepreneurship & Regional Development, 22(1), 25–45. https://doi.org/10.1080/08985620903220488