with M. Roche (HBS) - Forthcoming at Management Science 

We analyze the impact of the US Postal Service’s expansion in the late 1800s on firm creation and performance. Exploiting novel data constructed from digitized archives on historic business establishments, post office locations, and road network characteristics in California, we find a positive relationship between the expansion of the postal service and firm creation. To address endogeneity concerns, we exploit an unexpected change in the Californian postal service route network. In addition, we examine feasible channels, through which the US Mail may have promoted firm entry. These include its potential role as a financial service, as an arm connecting to other government services, as a mass communication infrastructure, or as a carrier of specialized knowledge. Our results suggest that of these proposed mechanisms, the latter played a particularly important role. Moreover, while increasing competition given new entry exerted downward pressure on many incumbents, actors relying on specialized knowledge inputs were able to most strongly benefit from local access to the US Mail. 

with P. Choudhury (HBS), K. Doran (University of Notre Dame), and C. Yoon (KDI) - Organization Science (2024)

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 C. Acosta - Organization Science (2023)

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 R. Choudhury (HBS)

We explore a previously unexamined aspect of migrants' contributions to local entrepreneurial ecosystems: the value created by cooperative interactions between migrants and locals in entrepreneurial ventures. Specifically, we analyze whether mixed teams composed of migrants and locals generate distinct entrepreneurial ideas compared to teams composed only of locals during an experimental intervention involving a two-day idea generation challenge. Through detailed surveys, evaluations by a panel of judges, and text analysis techniques, we find that while ideas tend to be comparable over a variety of dimensions for both groups, mixed teams are uniquely effective in proposing socially impactful entrepreneurial ideas. Further analyses indicate that this outcome does not stem from the inherent prosocial tendencies of migrants but from their interactions with locals, spurred by a process of bounded solidarity.

As global immigration flows surge, entrepreneurial teams in host countries are becoming more mixed. Conflicts and disputes between countries of origin of team members may, however, reduce the propensity to pursue joint ventures and exploit the advantages of diversity. Using data on the founders of startups established in Great Britain and information on global conflicts and disputes, this study finds a negative effect of conflicts on the entrepreneurial formation of ventures established by nationals of hostile countries. Social factors, such as a decline in mutual trust, are more relevant than economic considerations in explaining the evidence. The reduction of new companies with diverse founding teams is greater in areas hosting nationals in conflict and between nationals from countries where the government has stronger control over media. Startups of both low and high quality are impacted, especially in sectors dependent on high-skilled human capital such as finance and high-tech. Conflicts do not, however, impact the exit of existing firms. Finally, the decline in mixed entrepreneurship is not offset by the formation of other ventures with alternative team compositions, such as solo or same-nationality ventures, suggesting that global conflicts may lead to a net decline in entrepreneurship in host countries.

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 inclusive outcomes. We attempt to bring new evidence to this question by examining the impact of entrepreneurship on local-area income inequality, average incomes, and income mobility using IRS and U.S. Census Bureau microdata. In both fixed effects and IV models, we find that entrepreneurship increases income inequality, in line with previous literature, although this effect fades over time. Despite this, entrepreneurship raises average incomes across the distribution, especially for individuals at both tails. Younger individuals, Black, and foreign-born individuals, as well as low-income AIAN and Asian individuals, experience significant income gains. We also find that entrepreneurship serves as an important mobility tool for less well-off individuals, positively increasing their probability of rising to the top of the income distribution. These mobility effects are very strong for Asian, Hispanic, and foreign-born individuals, but not as pronounced for Black individuals relative to other groups, which is mostly related to wage-related dynamics rather than business ownership. In addition, we demonstrate that the positive effects on incomes and mobility are specific to high-quality entrepreneurship, as opposed to general entrepreneurship, which also includes subsistence-based activities.