Will Restricted U.S. Immigration Drive Business Operations Abroad?

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MIT SMR Strategy Forum

Each month, we pose a question about business, management, technology, or public policy to our panel of academic experts. Here you can see what they think and why.
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We asked our panel of strategy experts to tell us how strongly they agree with this statement:

Restrictions on skilled immigration will cause U.S. firms to shift more operations overseas.
RAW RESPONSES
WEIGHTED BY CONFIDENCE

Raw Responses

Responses weighted by panelists’ level of confidence

Panelists

Panelist Vote Confidence Comments

Richard Holden

University of New South Wales
Profile
Strongly Agree 10 “Skilled immigration — combined with sophisticated capital markets — has been at the heart of American dominance in the new economy. It is also vital in engineering and other fields that could move offshore.”

Barry Nalebuff

Yale University
Profile
Agree 8 “Less skilled immigration will make it harder to hire skilled workers in the U.S., which leads to more being hired outside the U.S. That might be done by non-U.S. firms who end up losing out. Take out ‘U.S.,’ and the answer is clear.”

Shane Greenstein

Harvard University
Profile
Strongly Agree 9 “Restrictions on skilled immigration HAVE ALREADY led firms to move some operations to other countries. More restrictions will lead to more moves.”

R. Preston McAfee

Economist
Profile
Agree 7 “In the tech sector, companies struggle to get more talent and already have large operations in London, Israel, Bangalore, China, and other locations. Substitution is already happening.”

Joshua Gans

University of Toronto
Profile
Strongly Agree 9 “It’s already happening to the benefit of Canada.”

Erik Brynjolfsson

Massachusetts Institute of Technology
Profile
Strongly Agree 10 “Highly skilled labor is essential for just about every American firm’s success. If it can’t come to them, they go to it.”

Steve Tadelis

University of California, Berkeley
Profile
Strongly Agree 10 “Skilled labor, especially in engineering and data science, is scarce. Firms compete vigorously for the best talent, and if restrictions will be imposed, firms will have to build talent pools abroad.”

Rajshree Agarwal

University of Maryland
Profile
Strongly Agree 10 “This is very consistent with the law of supply and demand in a global market for human capital. And we already see evidence of this phenomenon in U.S. firm operations across the Canadian border.”

John Roberts

Stanford University
Profile
Agree 8 “The complication is Trump’s tariffs. Otherwise, it is virtual certainty…”

Anita McGahan

University of Toronto
Profile
Strongly Agree 7 “Moving overseas as a hedging strategy is happening already.”

Olav Sorenson

Yale University
Profile
Agree 5 “If firms cannot get the talent that they need at home, they will need to shift more work abroad. But the upward wage pressure could also lead more U.S. citizens to pursue the jobs in question.”

Rebecca Henderson

Harvard University
Profile
Strongly Agree 9 “In my view, enabling skilled immigration is absolutely critical to long-term U.S. economic growth. The obvious contrast is with Japan, which is facing a major demographic crisis.”

John Van Reenen

Massachusetts Institute of Technology
Profile
Agree 6 “Restrictions will certainly hurt U.S. firms in terms of their productivity and innovation (which will therefore harm American wages). The shifting operations effect is less important than this.”

Daniel Levinthal

University of Pennsylvania
Profile
Agree 7 “I would think this effect would be focused on R&D/development activities as this effect won’t seem to impact the already strong forces pushing/keeping manufacturing overseas.”

Timothy Simcoe

Boston University
Profile
Disagree 5 “Literature says skilled immigrants boost U.S. firms’ foreign investment, so the relationship likely goes the other way. Without skills, however, no reason to think this implies more domestic investment.”

Ashish Arora

Duke University
Profile
Disagree 5 “In software outsourcing, H-1B visa holders were important complements to offshore work. Broadly, offshoring and immigration are likely to be complements.”

Tom Lyon

University of Michigan
Profile
Agree 6 “I suspect the larger effect will be to simply make U.S. firms less competitive, but we will see some offshoring among firms facing skills shortages here in the U.S.”

Maryann Feldman

University of North Carolina
Profile
Strongly Agree 8

Bruno Cassiman

University of Navarra
Profile
Agree 8 “The measure would reinforce the trend of increasing R&D investments outside the U.S. and Europe by companies headquartered in these regions.”

Yael Hochberg

Rice University
Profile
Agree 8 “Restricting skilled immigration will lead to high-value R&D and technical work being shifted to countries where the skilled talent exists.”

Melissa Schilling

New York University
Profile
Agree 10 “It will definitely increase labor costs and create skilled labor scarcity in some industries. For some firms, the efficient option will be to create (or expand) operations outside of the U.S.”

Lori Rosenkopf

University of Pennsylvania
Profile
Agree 6

Jennifer Brown

University of Utah
Profile
Neither Agree nor Disagree 7 “This may be true for tech and (some) engineering jobs, but organizations can’t readily relocate many high-skill, user-facing professionals, such as doctors, nurses, professors, etc. Some jobs are simply not mobile.”

Aaron Chatterji

Duke University
Profile
Did Not Answer

Francesca Gino

Harvard University
Profile
Did Not Answer

Kathleen Eisenhardt

Stanford University
Profile
Did Not Answer

Kathryn Shaw

Stanford University
Profile
Did Not Answer

Meghan Busse

Northwestern University
Profile
Did Not Answer

Topics

MIT SMR Strategy Forum

Each month, we pose a question about business, management, technology, or public policy to our panel of academic experts. Here you can see what they think and why.
Learn more about this series

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Comment (1)
Dominic Shum
Yes it should.