Immigrants start businesses at a faster rate; they seem to grow those businesses more successfully.
Democratic presidential nominee Hillary Clinton portrayed immigrants as more successful at starting and running businesses than natives in a recent interview. When Vox editor Ezra Klein asked Clinton if it would be good for the economy to increase immigration, Clinton gave a short answer: yes. "It is certainly the case that immigration has been and continues to be good for our economy," Clinton said June 22 (the interview appeared online July 11). "Immigrants start businesses at a faster rate; they seem to grow those businesses more successfully." Clinton’s statement on immigrant-owned businesses interested us. Are immigrants really better than native-born Americans at starting — and growing — successful businesses? What the data shows Clinton spokesman Josh Schwerin pointed us to analysis from the nonpartisan Kauffman Foundation that shows immigrants are almost "twice as likely" to start businesses than natives. The foundation looked at monthly data from the U.S. Census Bureau’s Current Population Survey from 1996 through 2014 and estimated that immigrants have a new entrepreneur rate of 52 percent compared to the native born rate of 27 percent. Their analysis also addressed the success of these businesses, but only within a certain subset - venture-backed firms. Immigrant founders from these companies have created about 150 jobs per company in the United States. According to the foundation, in 2011, 24 of the top 50 venture-backed businesses also had a least one foreign-born founder. Experts we spoke with generally agreed with Clinton’s claim. Although, there are some caveats. University of California, Santa Cruz economics professor Robert Fairlie, who authored a 2012 paper for the Small Business Administration on immigrant entrepreneurs, said that the success of these businesses is not as clear as the start-up data. "My estimates show that immigrants have a much higher business start rate than non-immigrants," Fairlie said. "There is also evidence showing that immigrant businesses are smaller on average than non-immigrant businesses." A 2011 report from the bipartisan Partnership for a New American Economy notes that 40 percent of Fortune 500 companies are founded by an immigrant or the child of an immigrant. Although, when the former CEO of AOL repeated this claim, we rated it Half True -- a company’s dominance could be more attributable to recent leaders more so than its founders. However, Clinton’s claim was not as definitive. "Immigrants are indeed more likely than others to be business owners," said David Kallick, a senior fellow at the Fiscal Policy Institute. "The claims about business ownership are sometimes overstated, but from the Vox quote, I’d say Hillary is on the mark." Steven Camarota, director of research at the Center for Immigration Studies, which advocates for stricter immigration policies, analyzed the Census Bureau’s 2015 Current Population Survey self-employment data by country for immigrants and natives. He found that immigrants from some countries, such as Brazil and Germany, do have higher business ownership rates than natives. But immigrants from other countries do not. Camarota said it is possible they start businesses at higher rates than natives, but "they fail at higher rates, too." But, Colgate University economics professor Chad Sparber, an immigration economy expert, said Clinton’s claim is accurate, noting that federal data shows that immigrants are "almost always more likely" to be self-employed than natives. "Though, self-employment isn’t necessarily the same thing as starting a business," Sparber said. Our ruling Clinton said, "immigrants start businesses at a faster rate; they seem to grow those businesses more successfully." Federal data and the experts we spoke with back up her claim. While it’s important to note that evidence on the success of immigrant-owned businesses is limited, what we did find supports what Clinton said, that immigrants "seem" to grow their businesses better than their native counterparts. We rate Clinton’s claim Mostly True. https://www.sharethefacts.co/share/9e394b49-c56d-49c0-8cc7-46eb68e4e919
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