Unlocking the Potential of Immigrant Exporters: Digital Resources as a Catalyst for Scalability and International Success
DOI:
https://doi.org/10.55016/ay8vzz76Abstract
Immigrant-owned small and medium-sized enterprises (SMEs) contribute significantly to trade and innovation in the Asia-Pacific Economic Cooperation (APEC) region. These businesses often exhibit a higher export intensity than their non-immigrant counterparts, reflecting their entrepreneurial ambition and commitment to international markets. However, they often struggle to scale their export activities, limiting their contribution to the burgeoning digital economy. This study examines the performance gap between immigrant and non-immigrant exporters with high export intensity, emphasizing the role of digital resources. We argue that immigrant exporters are particularly susceptible to a network scalability problem, where the costs of maintaining informal social networks across national borders outweigh the growth-related benefits.
Analyzing a sample of 7,761 Canadian small and medium-sized enterprises (SMEs), we confirm that the returns to high export intensity are lower for immigrant exporters. However, this performance gap can close and even reverse when they leverage significant digital resources. These findings indicate that coordinated trade, immigration and digital policies—e.g., the trade-immigration-digital (TID) policy nexus—can foster trade flows and inclusive economic growth between Canada and other APEC markets through more viable immigrant businesses.
Addressing the digital divide within APEC economies will be essential to realizing this economic potential, especially as digital trade intensifies. Therefore, APEC members must move beyond traditional trade agreements by identifying and harmonizing trade, business immigration, and digital priorities. These priorities could include minimizing trade and business migration barriers without compromising national security. Another priority is making affordable digital training, technologies, and infrastructure available to immigrant exporters and other less-established exporters.
By collaborating on these priorities, APEC can develop and implement transformational agreements that incentivize immigrant-owned SMEs to innovate and scale profitably and globally. These outcomes can close existing performance gaps between immigrant and non-immigrant businesses, making entrepreneurship an effective means to broadly shared prosperity and upward mobility. Ultimately, immigrant-owned companies and the broader SME sector could be transformed into engines of innovation and growth in regional and global economies.
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