Green Cards, Patents, and Firm Value

27 Pages Posted: 27 Jan 2017

See all articles by Erdem Aktug

Erdem Aktug

Columbia University; Morgan Stanley

Date Written: January 26, 2017

Abstract

This is the first study to use the approved Green Card Applications (or Certified Permanent Residency Applications) from the Program Electronic Review Management (PERM) database, and the first to link the PERM database to patents database kept by the US Patent and Trademark Office (USPTO). We find that the number of approved permanent residency applications (perms, as a percentage of total employment) has a positive impact on firms’ value and growth opportunities proxied by Tobin’s Q (TQ). Specifically, a 1% increase in perms lead to a 15-20% increase in firm value. Although we were not able to confirm that more green cards lead to more innovation, we discover that more innovation gets firms more Green Cards. We find that a 1% increase in the patent variable (patents as a percentage of total employment) lead to a 0.03% increase in Green Card Approvals. Our findings carry importance for US policy makers, firms, investors, and academics.

Keywords: Green Cards, Skilled Immigration, Patents, Innovation, Permanent Residency, Firm Value

JEL Classification: F15, F22, F23 ,J15, J44, L14, O31, O32, O33

Suggested Citation

Aktug, Rahmi Erdem, Green Cards, Patents, and Firm Value (January 26, 2017). Available at SSRN: https://ssrn.com/abstract=2906386 or http://dx.doi.org/10.2139/ssrn.2906386

Rahmi Erdem Aktug (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Morgan Stanley ( email )

1585 Broadway
New York, NY 10019
United States

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