How immigrant-owned firms spark job creation

A new StatCan study looks at the role of immigrant entrepreneurs in the economy

How immigrant-owned firms spark job creation

Businesses owned by immigrants are creating more jobs than firms with Canadian-born owners, new research from Statistics Canada revealed.

Raw (unadjusted) data compiled by StatCan from 2003 to 2013 showed companies founded by immigrants had a higher average annual net job creation per firm.

“[Firms] owned by immigrants who entered Canada since 1980 – the population of immigrants available in the dataset used for this study – accounted for 25% of the net jobs created in the private incorporated sector over the 11-year period, while representing 17% of the firms studied,” researchers noted.

The study also observed differences in the characteristics of immigrant-owned firms and firms with Canadian-born owners. Businesses established by immigrant entrepreneurs tended to be younger, and younger firms have higher job creation rates, according to StatCan.

Unadjusted results also suggested immigrant-owned enterprises were 1.3 times more likely to be a high-growth venture.

The disparity, however, narrows by 70% when the results are adjusted for differences in characteristics.

Immigrants to Canada are a ‘very heterogeneous’ group. “An immigrant owner’s educational attainment, source region or immigrant class (refugee, economic or family class) may affect the job creation rate of the immigrant-owned firm,” the researchers said.

“However, the adjusted results suggested that the characteristics of the immigrant owners had relatively little effect on the likelihood of an immigrant-owned firm being a high-growth or rapidly shrinking firm.”

The information in this study, StatCan said, offers a “useful first step in understanding the role of immigrant entrepreneurs in the Canadian economy.”

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