Management Science (2023)
Immigration has proven to be a major force driving entrepreneurial dynamics. In this paper I investigate how the geographical distribution of immigrants within a given country, and in particular the presence of "enclaves", affects the relationship between immigration and entrepreneurship. I examine the impact of Polish immigration to Great Britain following the unprecedented migration wave caused by the European Union enlargement in 2004. I address omitted variable concerns by using information on the location of historical Polish military settlements and the occupational composition and growth of Polish immigration in Ireland to construct instruments for enclaves and location choices of immigrants. The econometric results indicate, on the one hand, that immigration does increase immigrant entrepreneurship, but not in existing immigrant enclaves. On the other hand, immigrant entrepreneurs outside enclaves tend to achieve worse growth outcomes than those in enclaves. Further analyses provide an explanation to these findings due to blocked labor markets, and to the higher prevalence of "necessity entrepreneurship" outside of enclaves. These results offer new insights to understand the influence of geography on entrepreneurship in the presence of immigration.
with C. Acosta - Organization Science (2023)
Immigrant entrepreneurs are a major driver of economic growth, and their decisions about where to locate can greatly affect the entrepreneurial ecosystem of a country. Meanwhile, increasingly uncertain immigration environments might discourage immigrants from establishing new ventures in host countries. This paper exploits the unexpected result of the Brexit referendum to investigate the relationship between immigration uncertainty and the entry of immigrant-founded ventures of different quality. We propose a model of immigrant entrepreneurial entry and introduce a new measure of venture quality at founding. We find that a surge in uncertainty decreases the growth rate of new immigrant-founded firms by 3.2%. The reliance on other immigrant actors exacerbates the negative effect that uncertainty has on entry. Moreover, low- and high-quality firms are the most affected, while the effect for medium-quality firms is negligible. Back-of-the-envelope calculations suggest that Brexit discouraged the entry of around 620 low-quality and 250 high-quality firms. Our model suggests that while founders of low-quality ventures might decide to take up employment, founders of high-quality ventures might be better off establishing their companies in another country.
with M. Giorcelli and N. Lacetera - Journal of Economic Growth (2022)
We study the effects of scientific changes on broader cultural discourse, two phenomena that the economics literature identifies as key drivers of long-term growth, focusing on a unique episode in the history of science: the elaboration of the theory of evolution by Charles Darwin. We measure cultural discourse through the digitized text analysis of a corpus of hundreds of thousands of books as well as of Congressional and Parliamentary records for the US and the UK. We find that some concepts in Darwin’s theory, such as Evolution, Survival, Natural Selection and Competition, significantly increased their presence in the public discourse immediately after the publication of On the Origin of Species. Moreover, several words that embedded the key concepts of the theory of evolution experienced semantic and sentiment changes—further channels through which Darwin’s theory influenced the broader discourse. Our findings represent the first large-sample, systematic quantitative evidence of the relation between two key determinants of long-term economic growth, and suggest that natural language processing offers promising tools to explore this relation.
with P. Adams and R. Fontana, Industrial and Corporate Change, (2018)
This article presents an application of recent management theories concerning the effect of pre-entry experience and knowledge transfer within the context of creative industries. The setting of the empirical research is the television situation comedy industry in the United States between 1949 and 2011. Specifically, we explore the factors that explain the survival rate of sitcoms and their spin-offs. We develop two sets of indicators to explore the effect of pre-entry experience: team similarity and star power based on the character/actor. Our findings show that spin-offs, or sitcoms that inherit character/actors and theme elements from a successful parent sitcom, have a greater likelihood to survive than de novo sitcoms. Even further, the greater the number of team members that not only worked with each other on previous shows but worked together on the same parent show, the better the performance of the spin-off. We suggest that these results provide initial evidence that, consistent with the literature on spinouts in manufacturing industries, knowledge endowments represent an important source of performance heterogeneity in project-based industries.
with P. Choudhury (HBS), K. Doran (University of Notre Dame), and C. Yoon (KDI) - RR at Organization Science
We study how restrictive immigration policies and the unexpected loss of peers affect the performance of skilled migrants exploiting the unexpectedly increased denials of extensions of H-1B visas in the United States beginning in 2017. Losing a peer increased the individual performance of workers left behind, despite this effect being small in magnitude. However, we find that individuals who lost peers of the same ethnic background experience a substantial decrease in performance. To resolve the endogeneity surrounding visa-denial decisions, we build an instrumental variable that exploits the fixed duration of the visas. Our mechanism test suggests that ethnic ties boost individual performance through preferential channels of knowledge and information spillovers.
with J. Voorheis (US Census Bureau)
The question of who gains from high-quality entrepreneurship is crucial to understanding whether investments in incubating potentially innovative start-up firms will produce socially beneficial outcomes. We bring new evidence to this question by creating new aggregate measures of local-area income inequality, average incomes, and income mobility at a micro geographical level built using IRS and U.S. Census Bureau microdata. In both fixed effects and IV models, we find that entrepreneurship increases income inequality, as almost all of the gains associated with increased entrepreneurship accrue to the top 10 percent of the income distribution. However, we also find that entrepreneurship increases the average incomes of individuals in every section of the income distribution, despite the top 1 percent absorbing most of these gains. While start-up employees experience the highest increase in incomes in the short-term and gains from entrepreneurship tend to be broadly shared across different individuals, these rents dissipate quickly, and entrepreneurs and sophisticated investors are the only individuals who benefit in the long-term. Finally, we investigate the relationship between high-quality entrepreneurship and income mobility, and we find no evidence of a positive relationship.
with M. Roche (HBS)
We analyze the impact of the US Postal Service’s expansion in the late 1800s on firm creation and performance. Exploiting novel data constructed from digitized archives on historic business establishments, post office locations, and road network characteristics in California, we find a positive relationship between the expansion of the postal service and firm creation. To address endogeneity concerns, we exploit an unexpected change in the Californian postal service route network. In addition, we examine feasible channels, through which the US Mail may have promoted firm entry. These include its potential role as a financial service, as an arm connecting to other government services, as a mass communication infrastructure, or as a carrier of specialized knowledge. Our results suggest that of these proposed mechanisms, the latter played a particularly important role. Moreover, while increasing competition given new entry exerted downward pressure on many incumbents, actors relying on specialized knowledge inputs were able to most strongly benefit from local access to the US Mail.