https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3459001 Skip to main content PDF iconDownload This Paper Open PDF in Browser Add Paper to My Library Share: * * * * Permalink Using these links will ensure access to this page indefinitely [https://papers.ssrn.] Copy URL [https://dx.doi.org/1] Copy DOI The Role of High-Skilled Foreign Labor in Startup Performance: Evidence from Two Natural Experiments Journal of Financial Economics (JFE), Forthcoming 83 Pages Posted: 6 Oct 2019 Last revised: 26 Mar 2021 See all articles by Jun Chen Jun Chen Renmin University of China - School of Business Shenje Hshieh City University of Hong Kong Feng Zhang University of Utah - Department of Finance Date Written: September 28, 2020 Abstract We examine the role of high-skilled foreign labor in VC-backed startups through two natural experiments. First, we show that winning more H-1B visas in random lotteries enhances VC-backed startups' financial performance, likelihood of going public, and quantity and quality of innovation. Second, we show that the H-1B quota reduction in 2004 caused permanent damage to the performance of startups that previously had used H-1B workers. The findings imply that high-skilled foreign workers possess skills or talents that are difficult to replace and that barriers to securing H-1B visas lower startups' innovation and financial performance. Keywords: High-Skilled Foreign Labor, H-1B Visa, VC-Backed Companies, Innovation, Initial Public Offerings (IPOs) JEL Classification: G24, G28, G32, G34, G38 Suggested Citation: Suggested Citation Chen, Jun and Hshieh, Shenje and Zhang, Feng, The Role of High-Skilled Foreign Labor in Startup Performance: Evidence from Two Natural Experiments (September 28, 2020). Journal of Financial Economics (JFE), Forthcoming, Available at SSRN: https://ssrn.com/ abstract=3459001 or http://dx.doi.org/10.2139/ssrn.3459001 Jun Chen Renmin University of China - School of Business ( email ) 59 Zhongguancun Street, Haidian District Beijing, 100872 China Shenje Hshieh City University of Hong Kong ( email ) 83 Tat Chee Avenue Kowloon Hong Kong Feng Zhang (Contact Author) University of Utah - Department of Finance ( email ) David Eccles School of Business Salt Lake City, UT 84112-9303 United States PDF iconDownload This Paper Open PDF in Browser Do you have a job opening that you would like to promote on SSRN? 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