Working Paper: NBER ID: w31634
Authors: Saerom Ronnie Lee; Britta Glennon
Abstract: To spur entrepreneurship and economic growth, an increasing number of countries have introduced immigration policies that provide visas to skilled entrepreneurs. This paper investigates whether these policies influence the founding location choice of immigrant founders, by leveraging the introduction of Canada's Start-up Visa Program in 2013. We demonstrate that this immigration policy increased the likelihood that U.S.-based immigrants have a start-up in Canada by 69%. Our results show that Asian immigrants (who have a higher representation in Canada than in the U.S.) are disproportionately more likely to migrate to Canada to start their businesses, whereas Hispanic immigrants (who have a smaller representation in Canada than in the U.S.) are less inclined to do so. We also find that this propensity varies with the size of co-ethnic immigrant communities in the origin location. Overall, our study unveils the importance of immigration policies in determining founding location choice and has important implications for countries competing for global talent.
Keywords: No keywords provided
JEL Codes: F20; F22; J60; M13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Canada's startup visa program (M13) | increased likelihood of U.S.-based immigrants starting a business in Canada (N82) |
| size of co-ethnic immigrant communities (J15) | likelihood of Asian immigrants moving to Canada for entrepreneurship (F22) |
| Canada's startup visa program (M13) | location choices of immigrant founders (J61) |
| U.S.-based immigrants (K37) | stronger response to Canada's startup visa program compared to U.S. natives (O51) |
| Asian immigrants (J15) | greater responsiveness to Canada’s startup visa program compared to Hispanic immigrants (K37) |