Creative Immigrant Entrepreneurship and Institutions: Which Context Matters?
What about the link between institutions and the flows of creative[34] immigrant entrepreneurs? If the local context matters for channeling the domestic supply of entrepreneurship toward productivity and innovation, which context matters for channeling the global supply of entrepreneurship? In an open and competitive world, can strong, local institutions attract productive and innovative entrepreneurs from among the worldwide supply located within contexts with weak institutions? Can inclusive policies, institutions, and culture attract creative immigrant entrepreneurs? Conversely, can countries with weak institutions lose productive and creative native entrepreneurs to countries with better, more inclusive institutions elsewhere in the world? Which context(s) matter for immigrant entrepreneurs in general and for innovative immigrant entrepreneurs in particular?
Classic macroeconomic models do incorporate the role of technological innovations, e.g., through the R&D activities of highly skilled workers (Solow 1956; Romer 1990).
Still, they seem to take for granted the underlying motive to innovate. These models look at innovation factors after an entrepreneurial decision has already been made, as opposed to considering what prompts the incentive to innovate in the first place. In mainstream entrepreneurship research on the phenomenon of immigrant entrepreneurship, the direction is either toward the study of simple (or “low tech—low impact”) ethnic enterprise creation (Light 1972;Light and Bhachu 1992) or toward the research of complex (or “high tech-high impact”) ethnic enterprise creation and innovation (Hart and Acs 2011; Kerr 2008). A few studies are concerned with what determines an immigrant entrepreneur’s choice of the location itself, and with extending Israel Kirzner’s theory of entrepreneurial alertness and market process across locations.
Nastaran and Williams find that highly educated immigrant entrepreneurs decide against a place with high costs of doing business in favor of a place where they might have high social capital (Simarasl and Williams 2016). Others show that the U.S. environment is the preferred destination for highly skilled immigrants, ethnic scientists, and innovators alike (Kahn and MacGarvie 2014; Kerr 2010). Andersson introduces the role of space in Kirzner’s notion of entrepreneurial alertness and its implication to market coordination to help explain migration and other phenomena of economic development (Andersson 2005). He concludes that differences in property rights across countries might stimulate entrepreneurial alertness to cross-country profit opportunities, and thereby help explain the entrepreneurial actions of migrants, highlighting the role of the inter-spatial discovery of profit opportunities in entrepreneurship theory (Andersson 2005). This literature either falls short of delimiting what determines the flows of immigrant entrepreneurship at the global scale in general or innovative immigrant entrepreneurship in particular.