forthcoming at Organization Science

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 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 western expansion in the late 19th century - a major institutional innovation - on firm entry and its heterogeneous influence on firm performance. To investigate this, we construct a novel dataset leveraging newly digitized archival information on historic business establishments, their net worth, exact post office locations, and land and socioeconomic characteristics encompassing the state of California. To deal with concerns of omitted-variable bias, we saturate our models with corresponding fixed effects and a host of sociodemographic, land- and transportation-related controls. Moreover, we include instruments based on early settlement pathways and soil conditions. Following this approach, we find a positive relationship between the expansion of the postal service and the number of new businesses in a settlement. To provide more detailed evidence on the mechanisms underlying our main results, we examine feasible channels through which the US Mail may have promoted firm entry: by providing access to monetary distribution centers, government services, improved communication channels, and specialized knowledge. Our results support the latter. The implications for firm performance are more nuanced. Where increasing competition given new entry exerts downward pressure on many incumbents, actors relying on specialized knowledge inputs are able to benefit from close access to the US Mail.