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.