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Give Me Your Tired, Your Poor, Your High-Skilled Labor: H-1B Lottery Outcomes and Entrepreneurial Success

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  • Stephen G. Dimmock

    (National University of Singapore, Singapore 119245, Singapore)

  • Jiekun Huang

    (University of Illinois at Urbana–Champaign, Champaign, Illinois 61820)

  • Scott J. Weisbenner

    (University of Illinois at Urbana–Champaign, Champaign, Illinois 61820; National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

We study how access to high-skill labor affects the outcomes of start-up firms. We obtain exogenous variation in firms’ ability to access skilled labor by using win rates in H-1B visa lotteries. Relative to other firms that also applied for H-1B visas, firms with higher lottery win rates are more likely to receive additional venture capital funding and to have a successful exit via an IPO or acquisition. H-1B visa lottery winners also subsequently receive more patents and patent citations. Overall, our results suggest that access to high-skill labor is a critical determinant of success for start-up firms.

Suggested Citation

  • Stephen G. Dimmock & Jiekun Huang & Scott J. Weisbenner, 2022. "Give Me Your Tired, Your Poor, Your High-Skilled Labor: H-1B Lottery Outcomes and Entrepreneurial Success," Management Science, INFORMS, vol. 68(9), pages 6950-6970, September.
    • Handle: RePEc:inm:ormnsc:v:68:y:2022:i:9:p:6950-6970
    DOI: 10.1287/mnsc.2021.4152
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    Cited by:

    1. Tian, Yuan & Caballero, Maria Esther & Kovak, Brian K., 2022. "Social learning along international migrant networks," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 103-121.
    2. Anna Maria Mayda & Francesc Ortega & Giovanni Peri & Kevin Shih & Chad Sparber, 2023. "Coping with H-1B Shortages: Firm Performance and Mitigation Strategies," ILR Review, Cornell University, ILR School, vol. 76(5), pages 919-943, October.
    3. Weik, Stefan & Achleitner, Ann-Kristin & Braun, Reiner, 2024. "Venture capital and the international relocation of startups," Research Policy, Elsevier, vol. 53(7).
    4. Chen, Jun & Hshieh, Shenje & Zhang, Feng, 2021. "The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments," Journal of Financial Economics, Elsevier, vol. 142(1), pages 430-452.
    5. Britta Glennon, 2020. "How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1B Program," NBER Working Papers 27538, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    immigration; H-1B visa; IPO; venture capital; patent; innovation; skilled labor; high-skill immigration; hiring constraints;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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