Working Paper: NBER ID: w26392
Authors: Stephen G. Dimmock; Jiekun Huang; Scott J. Weisbenner
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 show that access to high-skill labor is a critical determinant of success for start-up firms.
Keywords: H-1B visas; startup firms; venture capital; patents; entrepreneurial success
JEL Codes: D22; G24; G32; J23; J24; J61; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| H-1B lottery outcomes (K37) | external funding (O36) |
| H-1B lottery outcomes (K37) | successful exits (Y60) |
| H-1B lottery outcomes (K37) | IPOs (G24) |
| H-1B lottery outcomes (K37) | innovation (patents) (O31) |
| H-1B lottery outcomes (K37) | innovation (citations) (O35) |