High-skilled immigration enhances regional entrepreneurship

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Abstract

Immigrants are highly entrepreneurial. But, what is the broader relationship between high-skilled immigration and regional entrepreneurship activity beyond the ventures that immigrants establish themselves? Using administrative data on newly awarded H-1B visas in the United States, we document a positive relationship between high-skilled immigration and regional entrepreneurship. A doubling of immigrants to a metropolitan statistical area is followed by a 6% increase in entrepreneurship within three years. In contrast, continuing H-1Bs and the arrival of unskilled immigrants (H-2B visas) do not increase regional entrepreneurship. Focusing on Indian immigrants (representing about 70% of all H-1B visas), we find the effect is stronger in metropolitan statistical areas with a larger local Indian population, but not other nationalities, suggesting that presence of conationals facilitates the relationship between high-skilled immigration and regional entrepreneurship. We present this and other evidence as consistent with a knowledge transfer mechanism.

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APA

Tareque, I. S., Guzman, J., & Wang, D. (2024). High-skilled immigration enhances regional entrepreneurship. Proceedings of the National Academy of Sciences of the United States of America, 121(37). https://doi.org/10.1073/pnas.2402001121

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