What is the US Comparative Advantage in Entrepreneurship? Evidence from Israeli Migration to the United States
59 Pages Posted: 29 Apr 2019 Last revised: 18 Mar 2021
Date Written: April 22, 2019
We investigate underlying sources of the US entrepreneurial ecosystem's advantage compared to other innovative economies by assessing the benefits Israeli startups derive from migrating to the US. Addressing positive sorting into migration, we show that migrants raise larger funding amounts and are more likely to have a US trademark and be acquired than non-migrants. Migrants also achieve a higher acquisition value. However, their patent output is not larger. We conclude that the US entrepreneurial ecosystem's advantage vis-à-vis other innovative economies arises from several sources producing sizeable gains for startups. These sources are investor availability, and large consumer and acquisitions markets.
Keywords: Entrepreneurship, Entrepreneurial Ecosystem, Startups, Location Choices, Performance Outcomes
JEL Classification: F21, F22, L22, L23, L26, M13, O32, O34
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