The ESG Initiative at the Wharton School
U.S. Immigrant Entrepreneurs Also Lured To Canada
Outlet: Forbes Online
The United States loses immigrants and international students to Canada. New research shows Canada’s startup visa policy has encouraged immigrants in the U.S. to move to Canada.
“To spur entrepreneurship and economic growth, an increasing number of countries have introduced immigration policies that provide visas to skilled entrepreneurs,” according to a new study by Saerom Lee and Britta Glennon of the Wharton School at the University of Pennsylvania. “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%.”
The study used a unique dataset from Revelio Labs of 1.2 million U.S.-based individuals who “founded a company either in the U.S. or Canada between 2006 and 2021.”
The research concluded immigrants to the United States from Asian countries were the most likely to start a business in Canada. “Our study also finds that, compared to immigrants of other ethnic groups, Asian immigrants were more responsive to this policy change,” write Lee and Glennon. “Furthermore, our results suggest this responsiveness varies by the presence of Asian immigrants in their prior location. That is, the larger the Asian immigrant enclaves in the origin location, the less likely that U.S.-based Asian immigrants in this location move to Canada to start a business.
“Taken together, these findings not only imply that immigration policy has a significant impact on the founding location decisions, but also reinforce the idea that this decision entails a complex weighting of multiple location factors—most notably, social ties and embeddedness. Put differently, when choosing their founding location, immigrant would-be founders seem to weigh the presence of co-ethnic immigrant communities against immigration policy.”