Immigrant business ownership and imports in Canada

Abstract

This paper empirically investigates the effect of immigrant business ownership on Canada's imports using a firm-level database with business ownership information and import data from 2002 to 2012. Our findings show that immigrant business ownership positively and significantly affects imports from the owners' origin, but it has little impact on imports from other regions. Compared to Canadian-owned firms, immigrant-owned firms are more likely to import, with a greater total value, a larger number of products and a higher average value per product from the owners' origin. The impact is larger for wholesalers than for manufacturers. The study also differentiates immigrant owners by their years since arrival. Firms owned by immigrants arriving within five years are more likely to import from the owners' origin than those owned by Canadians under the age of 45 by 14.66 percentage points, but this difference narrows to 6.22 percentage points when the owners stay for more than 15 years. Our findings suggest that while immigrant owners may enhance imports through connections with the origin, this advantage deteriorates with separation. Additionally, we find that immigrant business ownership has little effect on the total value of imports, as higher imports from the owners' origin are offset by lower imports from non-origin regions.