High skilled immigration boosts start-ups.

The discussion above is restricted to the effects of skilled immigration on existing, incumbent firms; while the empirical evidence thus far lands mostly on the side of skilled immigrants having a strong positive impact on firm innovation, productivity, and performance, there is still some debate.3 The effects of skilled immigrants on start-up performance—along a host of metrics including start-up creation, survival, success, and ability to attract venture capital funding—are, in contrast, more clear-cut. It may seem unlikely that immigrants will make a strong contribution to start-ups in the US economy, given that its skilled immigration policies tend to suppress entrepreneurship as an early career choice of immigrants (Agarwal, Ganco, and Raffiee 2021). However, immigrants are more likely than natives to start firms of all sizes, as Azoulay et al. (2022) show by drawing upon a range of data from administrative data on US firms to the Fortune 500 (see also Fairlie and Lofstrum 2015; Kerr and Kerr 2020). In addition, start-ups who can hire H-1B workers are more likely to have a successful exit via an initial public offering in the stock market or acquisition, and are more likely to receive additional venture capital funding (Dimmock, Huang, and Weisbenner 2022; Chen, Hshieh, and Zhang 2021).4 Some of that additional venture capital funding comes from abroad; hiring skilled immigrant workers improves start-ups’ access to international venture capital funding because of their home-country professional networks and familiarity with the home country culture (Li 2020).