Born entrepreneurs? immigrant self-employment in Spain

180 Pages·2010·1.675 MB·English

by  Irastorza, Nahikari

imiscoe
Are immigrants more enterprising than natives in Spain?  How successful are migrant I dissErtations
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entrepreneurs compared to those who start businesses in their country of birth? With s
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the growth of migration worldwide, questions such as these are garnering the attention o
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of economists, policymakers and scholars. Born Entrepreneurs? asks how foreignness z
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affects an immigrant’s ability to launch and to grow a successful business. It also Born Entrepreneurs?
explores the economic and social benefits that immigrants might derive from
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self-employment and the unique factors at play in so-called ethnic and immigrant o
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entrepreneurship. n

E Immigrant Self-Employment
Nahikari Irastorza is a postdoctoral researcher funded by the Basque regional n
t
government at Metropolis British Columbia, Simon Fraser University. She has con- r in Spain
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ducted research in Spain, Sweden, Colombia and Canada. She has published several p
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book chapters and presented her work at various international conferences in e
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Europe and North America. She has been awarded the Marie Curie International
e Nahikari Irastorza
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Outgoing Fellowship for the period 2011-2014.
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“Most of Europe’s population growth comes from immigrants. Immigrant entrepreneurship is poorly understood, and
Nahikari Irastorza has blazed a trail for Spain and the Basque Country with this fascinating study.”
Jonathan Levie, Reader, Hunter Centre for Entrepreneurship, University of Strathclyde, Glasgow
“This work presents a unique analysis to explain the differential success of Spanish immigrant entrepreneurs by
employing the intriguing concept of the liability of foreignness, which alone warrants a careful reading of this book.”
Don DeVoretz, Professor of Economics, Simon Fraser University, Burnaby, British Columbia
“A comprehensive look at contemporary Spanish migration, a critical appraisal of policy shortcomings and a diagnosis
for challenging some of migration studies’ previous analyses. In short, a much-welcomed book for anyone interested
in understanding immigration to Spain.”
Margarida Marques, New University of Lisbon
 978 90 8964 211 0
   · .. Amsterdam Universit y Press
Born Entrepreneurs?
IMISCOE
InternationalMigration, Integration and Social Cohesionin Europe
The IMISCOE Research Network unites researchers from, at present, 25 institutes
specialising in studies ofinternational migration, integration andsocial cohesion in
Europe. What began in 2004 as a Network of Excellence sponsored by the Sixth
Framework Programme of the European Commission has become, as of April
2009, an independent self-funding endeavour. From the start, IMISCOE has
promoted integrated, multidisciplinary and globally comparative research led by
scholarsfromvariousbranchesoftheeconomicandsocialsciences,thehumanities
and law. The Network furthers existing studies and pioneers new scholarship on
migration and migrant integration. Encouraging innovative lines of inquiry key to
Europeanpolicymakingandgovernanceisalsoapriority.
The IMISCOE-Amsterdam University Press Series makes the Network’s findings
and results available to researchers, policymakers and practitioners, the media and
other interested stakeholders. High-quality manuscripts authored by Network
members and cooperating partners are evaluated by external peer reviews and the
IMISCOEEditorialCommittee.TheCommitteecomprisesthefollowingmembers:
ChristinaBoswell,SchoolofSocialandPoliticalScience,UniversityofEdinburgh,
UnitedKingdom
TizianaCaponio,DepartmentofPoliticalStudies,UniversityofTurin/Forumfor
InternationalandEuropeanResearchonImmigration(FIERI),Turin,Italy
MichaelCollyer,SussexCentreforMigrationResearch(SCMR),Universityof
Sussex,UnitedKingdom
RositaFibbi,SwissForumforMigrationandPopulationStudies(SFM),University
ofNeuchâtel,Switzerland/InstituteofSocialSciences,UniversityofLausanne
AlbertKraler,InternationalCentreforMigrationPolicyDevelopment(ICMPD),
Vienna,Austria
LeoLucassen,InstituteofHistory,LeidenUniversity,TheNetherlands
JorgeMalheiros,CentreofGeographicalStudies(CEG),UniversityofLisbon,Portugal
MarcoMartiniello,NationalFundforScientificResearch(FNRS),Brussels/Center
forEthnicandMigrationStudies(CEDEM),UniversityofLiège,Belgium
PatrickSimon,NationalDemographicInstitute(INED),Paris,France
MiriSong,SchoolofSocialPolicyandSociology,UniversityofKent,UnitedKingdom
IMISCOEPolicyBriefsandmoreinformationcanbefoundatwww.imiscoe.org.
Born Entrepreneurs?
Immigrant Self-Employment in Spain
Nahikari Irastorza
IMISCOE Dissertations
Cover design: Studio Jan de Boer BNO,Amsterdam
Layout: The DocWorkers, Almere
ISBN 978 908964 243 1
e-ISBN 978 904851 2812
NUR 741 / 763
©Nahikari Irastorza /AmsterdamUniversity Press, Amsterdam 2010
All rights reserved. Without limiting the rights under copyright
reserved above, no part of this book may be reproduced, stored in or
introduced into a retrieval system,or transmitted, in any form or byany
means (electronic, mechanical, photocopying, recording or otherwise)
without the written permission of both the copyright owner and the
author of thebook.
Lehenengo aitari, gero amari
gero anai-arrebari
t’azkenorduan,ixil-ixilik
nere maite politari.
To my family, nearand far

Table of contents
List oftables 9
List ofgraphs 11
PARTI: INTRODUCTIONAND CONTEXT
1 Introduction 15
1.1 Justification of thestudy 15
1.2 Objectives of the study 17
1.3 Definition of concepts 18
1.3.1 Immigrants and foreigners 18
1.3.2 Entrepreneursand the self-employed 19
1.4 Structure ofthe study 20
2 Immigration to Spain: policies and facts 23
2.1 Immigration,labour market and
entrepreneurship in Spain 23
2.1.1 Internationalmigration to Spain 23
2.1.2 Immigration and labourmarket trendsin Spain 28
2.1.2.1Social Securityregistrations 28
2.1.2.2Work permits 39
2.2 Immigration policies in Spain 48
2.2.1 Residence permits 48
2.2.2 Work permits 49
PARTII: THEORETICALDISCUSSION
3 Literaturereview 53
3.1 Determinantsofimmigrants’ self-employment 54
3.1.1 Individual-relatedfactors 55
3.1.2 Context-related factors 57
3.2 Determinantsofimmigrants’ firm survival 59
3.2.1 The liability of foreignnessonventure survival 61
3.2.2 Determinantsofventure survival 62
3.3 Determinantsofimmigrants’ earnings 67
3.3.1 Individual-relatedfactors 69
3.3.2 Context-related factors 70
3.4 Ex-antediscussion ofethnic/immigrant entrepreneurship 72
8 BORNENTREPRENEURS?
4 Conceptual framework 75
4.1 General conceptual framework: stages of immigrants’
entrepreneurial process 75
4.2 Pre-start-up stage: likelihoodofself-employment 77
4.3 Post-start-up stage: Business survival 78
4.4 Post-start-up stage: Economic benefits 78
PARTIII: EMPIRICAL STUDY
5 Data and methodology 83
5.1 Description of thedatabases 83
5.2 Description of thesamples 86
5.3 Description of thevariables 92
5.3.1 Dependentvariables 92
5.3.2 Independent variables 93
5.4 Formulation of hypotheses 97
5.5 Description of themethodology 99
5.6 Correlation analyses 105
6 Resultsof the empirical analysis 117
6.1 Immigrants’ likelihood of self-employment 117
6.2 Foreign-ownedbusiness survival 124
6.3 Economic benefits of immigrants’self-employment 133
6.4 Summaryof findings 137
PARTIV: CONCLUSIONS ANDIMPLICATIONS
7 Finalconclusions 143
7.1 Discussion of the main findings 143
7.2 Ex-postdiscussionof ethnic/immigrantentrepreneurship146
7.3 Limitations ofthe study 147
8 Academicand policyimplications 149
8.1 Policyimplications 149
8.2 Future research suggestions 150
References 153
APPENDICES
Appendix 1 Description ofvariables 161
Appendix 2 Market entry, exit and turbulence rates in
the Basque Country 169
Appendix 3 Cox regression analyses for simulations 172
Tables
Table 1 Foreign population in Spain (1998-2007) 24
Table 2 Foreign population in Spain byregion of origin
(1998-2006) 27
Table 3 Foreign population in Spain bycountryof origin and
gender (1998-2006) 29
Table 4 Foreign population registeredwith the Social Security
department (1999-2005) 31
Table 5 Foreign population registeredwith the Social Security
department bySpanishregions (1999-2005) 33-34
Table 6 Foreign population registeredwith the Social Security
department byorigin (1999-2005) 37
Table 7 Foreign population registeredwith the Social Security
department bytype ofwork and origin (January 2007) 38
Table 8 Foreign population registeredwith the Social Security
department byage and gender (1999-2006) 40
Table 9 Work permitsissued to foreigners by theSpanish
authorities bytype of work (1998-2005) 41
Table 10 Work permitsissued to foreigners by theSpanish
authorities bySpanish region (1998-2005) 42
Table 11 Wage-employment permits issued to foreigners bythe
Spanish authorities bySpanishregion(1998-2005) 44
Table 12 Self-employment workpermits issued to foreigners by
the Spanish authoritiesby Spanish region (1998-2005) 46
Table 13 Characteristics ofthe sample:Determinantsofself-
employment 88-89
Table 14 Characteristics ofthe sample:Determinantsoffirm
survival 89-90
Table 15 Characteristics ofthe sample:Determinantsof
earnings 91
Table 16 Correlation matrixfor potential entrepreneurs: Total
sample 104-105
Table 17 Correlation matrixfor potential entrepreneurs:
Immigrants 107
Table 18 Correlation matrixfor potential entrepreneurs:
Natives 108