The role of high-skilled foreign labor in startup performance: Evidence from two natural experiments

Chen, Jun; Hshieh, Shenje; Zhang, Feng

doi:10.1016/j.jfineco.2021.05.042

Cited by 28 publications

(4 citation statements)

References 60 publications

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“…For example, audit firms and offices face strong resource constraints when they handle too many clients (Goodwin & Wu, 2016;Gul et al, 2017;Sundgren & Svanström, 2014), grow too fast (Bills et al, 2016), and face concentrated client deadlines (Czerney et al, 2019;L opez & Peters, 2012). Prior research also shows that foreign workers, in general, are well-educated and skilled (Chen et al, 2021; W. R. Kerr & Lincoln, 2010). Moreover, anecdotal evidence from practitioners indicate that H-1B visa holders also have a strong work ethic.…”

Section: Development Of Hypothesesmentioning

confidence: 99%

“…Following Chen et al (2021), we utilize a shock to H-1B visa policy and conduct a DiD analysis. The shock is the sharp reduction in the H-1B visa cap beginning in 2004.…”

Section: Reduction In H-1b Visa Quotamentioning

confidence: 99%

“…Since 2004, the annual cap has worked to limit H-1B immigration. 20 Moreover, this shock was largely unanticipated (Chen et al, 2021;Kato & Sparber, 2013).…”

Section: Reduction In H-1b Visa Quotamentioning

confidence: 99%

“…We find the IV positively predicts our cumulative LCA measure, and a higher predicted value of cumulative LCA is associated with a smaller mean absolute value of discretionary accruals at the office level. Finally, we employ a quasi-natural experiment (Chen et al, 2021) to conduct a difference-in-differences (DiD) analysis in which we utilize the shock of a drastic reduction in the annual H-1B visa quota to the number of nationwide immigrants. We find that, after this shock, the audit quality of offices that file any LCA before 2004 decreases more than the audit quality of offices that do not, suggesting that the audit offices that rely more on foreign labor suffer more from the quota cut.…”

Section: Introductionmentioning

confidence: 99%

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Foreign labor and audit quality: Evidence from newly hired H‐1B visa holders

Frost,

Jing,

Shang

et al. 2024

Contemporary Accting Res

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Foreign workers have been an important part of the labor force in public accounting firms over the past two decades. In this paper, we investigate whether and why foreign workers influence audit quality. We find that audit offices with more newly hired foreign labor have a lower mean absolute value of discretionary accruals and a smaller rate of restatements for their clients. The effect is more pronounced for audit offices that face more resource constraints or require greater foreign expertise. The results of improved audit quality are robust to alternative measures of immigrant intensity and audit quality, alternative samples, and using different ways to address endogeneity concerns. Overall, our paper contributes to the literature by showing the impact of foreign labor in the auditing profession and provides public policy implications for the recent H‐1B visa debate.This article is protected by copyright. All rights reserved.

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Section: Development Of Hypothesesmentioning

confidence: 99%

“…Following Chen et al (2021), we utilize a shock to H-1B visa policy and conduct a DiD analysis. The shock is the sharp reduction in the H-1B visa cap beginning in 2004.…”

Section: Reduction In H-1b Visa Quotamentioning

confidence: 99%

“…Since 2004, the annual cap has worked to limit H-1B immigration. 20 Moreover, this shock was largely unanticipated (Chen et al, 2021;Kato & Sparber, 2013).…”

Section: Reduction In H-1b Visa Quotamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations