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Could changes in the migration law attract foreign entrepreneurs?

Sweden liberalized labour migration policy in 2008 to allow third-country nationals to enter Sweden for entrepreneurship, not only for work. This unique element — a residence permit for entrepreneurship — was introduced by changes in the migration law. But has it been successful? CSR-affiliated researcher Aliaksei Kazlou took a closer look at the matter together with fellow researcher Susanne Urban.

"The aim of this study was to explore the outcome of this policy", says Aliaksei on his paper "Swedish migration policy liberalization and new immigrant entrepreneurs".

"The study adds time perspective and superdiversity and operationalizes the mixed embeddedness framework to facilitate a quantitative study on three levels of analysis", he says.

Detailed register data for two cohorts of immigrants — those who arrived four years before and those who arrived four years after the reform — are used. The results confirm the usefulness of the mixed embeddedness model, that is the institutional regulative context, economic and social context, and individual resources, in the analysis of immigrant entrepreneurship.

Even though the changes in migration law related to residence permits for immigrant entrepreneurs appear very attractive, few immigrant entrepreneurs used this opportunity to apply for a residence permit to start and run a business in Sweden, which is puzzling since Sweden is an attractive business destination.

"I was surprised that so few immigrants obtained a residence permit as entrepreneurs annually in Sweden", says Aliaksei regarding the outcome.

The study shows that the propensity to engage in entrepreneurship is more affected for refugees and students than for migrants with a residence permit for work and entrepreneurship. This indicates a need for further facilitating the process to immigrate for entrepreneurial reasons. The paper also contributes policy recommendations based on an empirical investigation of the effects of migration policy change on migrants' probability of becoming entrepreneurs in different sectors.

Read the full paper here