Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs

Abstract

This paper analyzes how US universities contribute to the quantity and quality of VC-backed immigrant entrepreneurship in the US. Using a novel data set that identifies immigration status and education history for the near-universe of VC-backed founders in the US, we document several interrelated facts. First, immigrants contribute disproportionately to US VC-backed entrepreneurship, accounting for approximately 20% of VC-backed companies. More than 75% of these immigrant entrepreneurs obtained post-secondary education in the US, which suggests that higher education represents a primary entry channel for foreign entrepreneurial talent into the country. Given these facts, we assess how universities shape both the geographic distribution and the quality of immigrant entrepreneurship. Close to 40% of US-educated immigrants start a company in the state of their alma mater, suggesting that place of education substantially impacts immigrant entrepreneurs’ start-up location choice. Regarding firm quality, immigrant founders are also more likely to found financially successful and scientifically innovative start-ups than their US-born counterparts. Altogether, the results suggest that foreign students educated in US universities substantially contribute to local and national VC-backed entrepreneurship, thereby identifying higher education’s global scope as a potential tool to attract entrepreneurial talent and encourage entrepreneurial growth.

Keywords: Entrepreneurship, Venture Capital, Immigration, Education

JEL Classification: G24, J0, J15, J24, L26