Go West Young Firm: The Impact of Startup Migration on the Performance of Migrants

Posted: 23 May 2018 Last revised: 16 Nov 2022

See all articles by Jorge Guzman

Jorge Guzman

Columbia University - Columbia Business School; NBER

Date Written: March 1, 2019

Abstract

This paper studies how regional migration to tech clusters impacts the performance of startups within the United States. Startups that move to Silicon Valley experience a significant improvement in performance. This improvement is higher than migrations to other regions in the U.S., many of which report null treatment effects. The startups that benefit the most from migration are those leaving low performing entrepreneurial ecosystems, and moving to high performing ecosystems, consistent with an agglomeration mechanism. Within different measures of the ecosystem, the level of local patenting predicts startup improvements more than venture capital or the quality-adjusted number of startups, suggesting the local innovation environment is more important to migrant performance than financing or the presence of other startup peers.

Keywords: entrepreneurship, location, strategy, silicon valley, agglomeration

JEL Classification: L20

Suggested Citation

Guzman, Jorge, Go West Young Firm: The Impact of Startup Migration on the Performance of Migrants (March 1, 2019). Columbia Business School Research Paper No. 18-49, Available at SSRN: https://ssrn.com/abstract=3175328 or http://dx.doi.org/10.2139/ssrn.3175328

Jorge Guzman (Contact Author)

Columbia University - Columbia Business School ( email )

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