What is the US Comparative Advantage in Entrepreneurship? Evidence from Israeli Migration to the United States

57 Pages Posted: 29 Apr 2019 Last revised: 3 Sep 2019

See all articles by Annamaria Conti

Annamaria Conti

University of Lausanne

Jorge Guzman

Columbia University - Columbia Business School

Date Written: April 22, 2019

Abstract

This paper investigates the underlying sources of the US entrepreneurial ecosystem's comparative advantage by assessing the benefits Israeli technology startups derive from migrating to the US. To address positive sorting into migration we adopt three complementary approaches, which include examining exogenous institutional constraints on the startups' ability to migrate, estimating a double-LASSO regression, and estimating a startup fixed-effects model exploiting across migrant variation in migration age. We show that migrants raise larger funding amounts and are more likely both to apply for a trademark and to be acquired than non-migrants. Conditional on an acquisition, migrants also achieve a higher transaction value. However, they do not hold more patents than non-migrants. We conclude that the US entrepreneurial ecosystem’s comparative advantage vis-à-vis other innovative economies, such as Israel, arises from a multitude of sources that produce sizeable gains for startups. These sources are high investor availability, a large consumer market, and a developed market for acquisitions.

Keywords: Entrepreneurship, Entrepreneurial Ecosystem, Startups, Location Choices, Performance Outcomes

JEL Classification: F21, F22, L22, L23, L26, M13, O32, O34

Suggested Citation

Conti, Annamaria and Guzman, Jorge, What is the US Comparative Advantage in Entrepreneurship? Evidence from Israeli Migration to the United States (April 22, 2019). Available at SSRN: https://ssrn.com/abstract=3376131 or http://dx.doi.org/10.2139/ssrn.3376131

Annamaria Conti (Contact Author)

University of Lausanne ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland

Jorge Guzman

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

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