Research Snapshots

The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments

Shenje Hshieh and colleagues examine the role of high-skilled foreign labor in VC-backed startups through two natural experiments. First, they 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, they 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.

Chen, Jun; Hshieh, Shenie; Zhang, Feng "The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments." October 2021: In: Journal of Financial Economics. Vol. 142, No. 1, pp. 430-452

Reference:
https://www.sciencedirect.com/science/article/pii/S0304405X2100235X