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Go West Young Firm: The Impact of Startup Migration on the Performance of Migrants

Author

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  • Jorge Guzman

    (Columbia Business School Management Division, Columbia University, New York, New York 10027; National Bureau of Economic Research, Cambridge, Massachusetts 02138)

Abstract

This paper studies how regional migration to tech clusters impacts the performance of startups within the United States. Startups that move to Silicon Valley experience a significant improvement in performance. This improvement is higher than migrations to other regions in the United States, many of which report null treatment effects. The startups that benefit the most from migration are those leaving low performing entrepreneurial ecosystems and moving to high performing ecosystems, consistent with an agglomeration mechanism. Within different measures of the ecosystem, the level of local patenting predicts startup improvements more than venture capital or the quality-adjusted number of startups, suggesting the local innovation environment is more important to migrant performance than financing or the presence of other startup peers.

Suggested Citation

  • Jorge Guzman, 2024. "Go West Young Firm: The Impact of Startup Migration on the Performance of Migrants," Management Science, INFORMS, vol. 70(7), pages 4824-4846, July.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:7:p:4824-4846
    DOI: 10.1287/mnsc.2023.4924
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