The Influence of Role Models on Immigrant Self-Employment: A Spatial Analysis for Switzerland

Purpose – Theoretical and empirical research suggests a connection between the presence of role models and the emergence of entrepreneurs. Existing entrepreneurs may act as role models for self-employment candidates by providing successful examples. The purpose of this paper is to show that role models matter in aggregate decision outcomes regarding self-employment. Design/methodology/approach – By explicitly considering the self-employment rates of the natives, which may influence locally the decisions of immigrants towards entrepreneurship, the authors develop a simple model that explains immigrant self-employment rates for a sample of 2,490 Swiss municipalities. In addition, the authors accommodate for the presence of spatial spillovers in the distribution of rates, and test a spatial autoregressive model which takes into account the average self-employment rates of immigrants living in nearby municipalities. Findings – The evidence shows a significant (positive) effect of such spatial network effects, which are characterized by a quick distance decay, suggesting spatial spillovers at the household and social network level. Additionally, the paper shows that local conditions and immigrant pool characteristics differ, with respect to self-employment choices, when examining separately urban and rural contexts. Finally, a spatial sensitivity analysis shows that the findings are consistent over different assumptions on the nature of spatial interaction. Originality/value – By using highly geographically disaggregated data, the authors are able to test the extent to which the influence of role models can be traced, and to measure these effects both within local units as well as in neighbouring units. Understanding the relationship between the native and immigrant attitudes towards entrepreneurship, the local characteristics of the immigrant community and geography is crucial in a country with a relevant share of the working population made up by immigrants.