Ethnicity and immigration status may play a role in entrepreneurship and innovation, yet the impact of university entrepreneurship education on this relationship is under-explored. This paper examines the persistence and differences in entrepreneurship by ethnicity and nationality. We find that among Stanford alumni, Asian Americans have a higher rate of entrepreneurship than white Americans. However, non-American Asians have a substantially lower, about 12% points lower, start-up rate than Asian Americans. Such discrepancy not only holds for entrepreneurial choice but also for investing as an angel investor or venture capitalist, or utilizing Stanford networks to find funding sources or partners. Participation in Stanford University’s entrepreneurship program as a student does little to reduce this gap. The low level of parental entrepreneurship and the high degree of intergenerational correlation in entrepreneurship likely result in the lower level of entrepreneurship and participation in university entrepreneurship programs among Asians relative to their Asian American counterparts. Our findings highlight the value of immigration in terms of breaking the persistence in entrepreneurship among certain ethnic groups and promoting potential high-growth entrepreneurship in the United States. In addition, our findings may have important implications for programs to incorporate immigrant entrepreneurs within their home countries to promote entrepreneurship and help break the persistence of entrepreneurship across generations.

Introduction

The important role of universities as well as immigrants in driving innovation and entrepreneurship is increasingly recognized (Saxenian, 2006; Åstebro et al., 2012). For example, Hsu et al. (2007) find that among MIT alumni, non-US citizens become entrepreneurs at significantly higher rates than US citizens.1 Despite the importance of both universities and immigrants, these two literatures have largely evolved independently, leaving us with relatively little to say about the possible impact of university or public policies on high-skilled immigrant entrepreneurs. One of the most notable features of entrepreneurship and innovation in Silicon Valley is the role Asian immigrant entrepreneurs have played (Saxenian, 1999, 2006). Despite the importance of Silicon Valley entrepreneurship and innovation, there is surprisingly little empirical analysis of entrepreneurial activity that originates from Silicon Valley. This paper examines the persistence and differences in entrepreneurship rates of Stanford alumni by ethnicity and nationality. Rather than examining issues of causality, our goal is to present an exploratory analysis of the patterns of Stanford alumni becoming entrepreneurs by family background, ethnicity and nationality. Analysis of a population from a research university with a well-established reputation for innovation and entrepreneurship is important in establishing basic facts regarding university-trained, high skill immigrants. We know from anecdotal and systematic evidence that top research universities generate many leading firms. Many of these companies were started by either immigrants or first-generation U.S. citizens (Hart and Acs, 2011).2 Research on academic entrepreneurship focuses largely on faculty entrepreneurs, technology transfer, and university spinoffs (Dahlstrand, 1997; Di Gregorio and Shane, 2003; Etzkowitz, 1998, 2003; Nicolaou and Birley, 2003; Vohora et al., 2004). Yet, we now know that the influence of the university on entrepreneurial behavior includes students and alumni as well (Åstebro et al., 2012; Bramwell and Wolfe, 2008; Hsu et al., 2007). However, the impact of the university environment on entrepreneurship among alumni merits deeper exploration, especially when it comes to immigrants and students from non-Caucasian, non-domestic backgrounds.