Journal of Financial Economics Vol. 142 No. 1 2021
The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments
Abstract
We examine the role of high-skilled foreign labor in VC-backed startups through two natural experiments. First, we show that winning more H-1B visas in random lotteries enhances VC-backed startups’ financial performance, likelihood of going public, and quantity and quality of innovation. Second, we show that the H-1B quota reduction in 2004 caused permanent damage to the performance of startups that previously had used H-1B workers. The findings imply that high-skilled foreign workers possess skills or talents that are difficult to replace and that barriers to securing H-1B visas lower startups’ innovation and financial performance.
- DOI
- 10.1016/j.jfineco.2021.05.042
- Volume
- 142
- Issue
- 1
- Pages
- 430-452
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref