Level of Education and Family Dynamics among Immigrant and Nonimmigrant Business Owners in the Case of Arlington County, VA.

Author:Quigley, Behnaz Z.
 
FREE EXCERPT

INTRODUCTION

It is common knowledge that the United States is a nation of immigrants and is turning immigrants from all over the world into Americans: Greek Americans, Indian Americans, Italian Americans, Persian Americans, Arab Americans, etc. However, impediments to good jobs and upward mobility forces them into self-employment (Fray, 2013). Regardless of their level of education or family status, these immigrant business owners contribute significantly to the economy. Immigrant-owned firms generate over $775 billion in revenues, $125 billion in payroll, and $100 billion in income. They employ one out of every ten workers. Immigrant owned firms constitute 18% of all Fortune 500 companies (Kallick 2012). 10.5%of immigrants own a business, compared with 9.3% of non-immigrants (Fairlie, 2012).

The SBA office of advocacy defines a small business as an independent business having fewer than 500 employees. According to the census bureau, there were about 14.7 million self-employed people in 2010. However, the number of firms is even greater-27.3 million in 2010. These firms are called many different things, such as small and medium size enterprises (SME), independent small businesses, or owner-managed firms. Of these independent business owners, 900,000 are immigrants, according to the Fiscal Policy Institute research initiative (2012).

More research in the area of entrepreneurship and specifically SMEs always help present and future entrepreneurs. It is to this end that in this paper an attempt is made to look at two major factors of the success of these businesses: level of education of the entrepreneurs and the role of family. The sample chosen for this study is from Arlington County, Virginia, a suburb of Washington D.C.

Research Methodology and Study Sample

The Arlington Development Office (AED) has a business program which is the small business and entrepreneurial assistance network of Arlington County. This program is known as the Virginia Department of Small Business and Supplier Diversity (SBSD). SBSD has certified and registered a total of 5,936 small businesses in Arlington County, Virginia (AED, 2016). According to Kate Barbee, who works for the Arlington Economic Development Office, approximately 30% of small business members of the SBSD are immigrants to the United States; that is, approximately 1,789 small business owners. Not knowing which businesses were owned by immigrants or American born entrepreneurs, a questionnaire, containing 35 questions to cover many topics of the authors' interest randomly were sent to 300 business owners in Arlington County. The rate of the response was about 25%. A number of statistical tests were conducted. However, this paper only deals with questions related to the level of education and family dynamic issues.

Level of Education and Possible Connection to Monetary Success

Education is, of course, important for the success of any individual regardless of her/his choice of profession. Being an entrepreneur is no exception. Quite often, many immigrants who might be highly educated with all kinds of degrees from their original home countries, due to either language deficiency or visa status, are not able to find a job in their related field, not to mention the possible discrimination of being considered "other"! As a result, frequently those who are more daring and do not mind being risk takers become entrepreneurs and business owners.

Research by Sonfield and Lussier (2014) supports that there is a positive relationship between an entrepreneur's level of education and level of innovation in the entrepreneur's venture. New innovation often can result in more profitability. Al-Zubeidi (2005) found out that the level of education of a business owner has a significant relationship with business success. The higher the level education, the higher the sales volume. Robb and Fairlie (2009) also report that level of education is significantly related to the success of a business. According to Characteristics of Business Data (CBO), the business owners that have dropped out of high school, compared with the business owners with college degrees, are 5.05% more likely to close their business. Also, the business owners with college degrees more likely make $10,000 more profit than business owners with no degrees, according to the same study. Lastly, these business owners have 25% higher sales than business owners with no degrees.

Considering these studies, two observations regarding education levels of immigrant entrepreneurs in Arlington country can be made:

1- Immigrant entrepreneurs in Arlington County are more educated than nonimmigrant entrepreneurs.

2- Immigrant entrepreneurs in Arlington County make more money than nonimmigrants possibly due to their higher level of education.

According to the Fiscal Policy Institute's Immigration Research...

To continue reading

FREE SIGN UP