Seminarios Académicos

event Publicación: 31/05/2023

The Effect of Immigration Policy on Founding Location Choice: Evidence from Canada’s Start-up Visa Program

Autor: Britta Glennon (Wharton School of Business at the University of Pennsylvania)

Abstract: Over the past decade, a growing number of countries have adopted new policies to provide visas to skilled entrepreneurs, hoping to encourage entrepreneurship and conomic growth. However, entrepreneurs are well known to exhibit a home bias, preferring to found their startups close to where they already live and work. In this paper, we investigate whether these immigration policies influence the founding location choice of immigrant founders, leveraging the introduction of Canada’s Start-up Visa Program in 2013 and analyzing a unique cross-border, longitudinal dataset of 1.2 million individuals with at least a bachelor’s degree who lived in the U.S. before 2013 and started a company in the U.S. or Canada between 2009 and 2021. We find that Canada’s mmigration policy increased the likelihood that immigrants previously based in the U.S. start a company in Canada by 169.2 to 271.4%. Additional analyses 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. Women immigrants and those located in locations with a high density of startups and/or immigrants are also less likely to do so. The results have important implications for our understanding of the founding location choice and demonstrate that entrepreneurship visas are, indeed, an effective tool for countries competing for global talent to promote immigrant entrepreneurship within their borders.