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

Saerom (Ronnie) Lee and Britta Glennon

No 31634, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: To spur entrepreneurship and economic growth, an increasing number of countries have introduced immigration policies that provide visas to skilled entrepreneurs. This paper investigates whether these policies influence the founding location choice of immigrant founders, by leveraging the introduction of Canada's Start-up Visa Program in 2013. We demonstrate that this immigration policy increased the likelihood that U.S.-based immigrants have a start-up in Canada by 69%. Our results 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. We also find that this propensity varies with the size of co-ethnic immigrant communities in the origin location. Overall, our study unveils the importance of immigration policies in determining founding location choice and has important implications for countries competing for global talent.

JEL-codes: F20 F22 J60 M13 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-ent, nep-int, nep-lab, nep-mig, nep-sbm and nep-ure
Note: PR
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Citations: View citations in EconPapers (1)

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