Immigrant entrepreneurship and the origin of bankers

Tove Eliasson ()
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Tove Eliasson: IBF, Uppsala University, Postal: Uppsala, Sweden

No 2014:19, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: Earlier research has shown that immigrant- and minority entrepreneurs have difficulties accessing capital through the formal financial markets. This essay studies what role immigrant employees within the local bank sector have for the probability of immigrants to run their own businesses. I use linked employer-employee data covering the whole Swedish labor market for the years 1987 to 2003 and utilize a nationwide refugee dispersal policy to get exogenous variation in the exposure to co-ethnic bank employees. Results suggest that there is a positive relation between co-ethnic bank employees and the probability of being self-employed. This effect is most pronounced for immigrants who arrived with low education, for males and for those residing in metropolitan regions. The effects are substantial and robust to a wide set of controls for labor market characteristics of the ethnic group at the local level. These results provides evidence of an ethnic component in the formal credit markets.

Keywords: Self-employment; immigrant entrepreneurs; capital access; information asymmetry; minority representation (search for similar items in EconPapers)
JEL-codes: G21 J71 M13 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2014-08-12
New Economics Papers: this item is included in nep-ent, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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