Immigration causes American businesses to fail and that is a good thing

The purpose of this paper is to investigate the relationship between immigration rates and business failure, where business failure is viewed as a proxy for the presence of entrepreneurship.

It employs a panel data approach to the USA, using the percentage of the population that is foreign born as the explanatory variable for the business failure rate ten years later.

The authors find the effect to be large, with a one standard deviation increase in the foreign born population corresponding to a 1.09 standard deviation increase in business failure rate, and the authors argue, entrepreneurship.

The effect the authors find is very large though perhaps also counterintuitive.