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This paper uses individual-level panel data for all self-employed in the retail and service sectors to study how immigrant- and native-owned firms perform and contribute to job creation in Sweden. We use an individual fixed-effects model to explore how self-employment outcomes among immigrants and natives evolve with self-employment experience. The advantage of our approach is that it enables estimations of the returns to self-employment experience while controlling for unobservable time-constant individual factors. The results show that profits increase with self-employment experience and at a faster rate among immigrant men and women than for their native counterparts. Turnover and the likelihood of having employees both increase with experience and in a similar magnitude for immigrants and natives. [ABSTRACT FROM AUTHOR]

We find evidence that parents with different cultural background favour self-employment experiences of their children. The effect of parental cultural diversity turns out to be stronger for children with no siblings or having at least a parent with universitary degree. [ABSTRACT FROM AUTHOR]