The role of high-skilled foreign labor in startup performance : Evidence from two natural experiments
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
Original language | English |
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Pages (from-to) | 430-452 |
Journal / Publication | Journal of Financial Economics |
Volume | 142 |
Issue number | 1 |
Online published | 31 May 2021 |
Publication status | Published - Oct 2021 |
Link(s)
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.
Research Area(s)
- H-1B visa, High-skilled foreign labor, Initial public offerings (IPOs), Innovation, VC-backed companies
Citation Format(s)
The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments. / Chen, Jun; Hshieh, Shenje; Zhang, Feng.
In: Journal of Financial Economics, Vol. 142, No. 1, 10.2021, p. 430-452.
In: Journal of Financial Economics, Vol. 142, No. 1, 10.2021, p. 430-452.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review