September, 2013

Liberty, Dignity, and Innovative Immigrant Entrepreneurship

  • Olga Nicoara

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This paper applies the Bourgeois Liberty and Dignity Model for modern economic growth, advanced by Deirdre McCloskey (2011), to explain the phenomenon of innovative or high-tech immigrant entrepreneurship in developed economies. After investigating the strengths and weaknesses of the neoclassical economic theories in explaining innovative immigrant entrepreneurship as a particular instance of the modern growth, I propose an alternative endogenous model that accounts for McCloskey’s social honor and economic liberty into an immigrant entrepreneur’s production function. The model also accounts for the extent of the existing market knowledge propitious for innovative entrepreneurial discoveries. Using international data for social honor and economic liberty, I illustrate how societies with contrasting combinations in the cultural attitudes towards entrepreneurship on one side, and contrasting qualities in their formal institutions, on the other side, experience the most flows of innovative immigrant entrepreneurship.

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