Skilled Immigration, R&D Concentration, and Industry Consolidation.

This article investigates the impact of skilled immigration restrictions, specifically the reintroduction of the H1B visa lottery system in 2014, on corporate innovation, R&D activities, and industry market structure in the United States. It finds that binding caps on H1B visas reduced firms' access to skilled immigrant R&D labor, prompting many firms—especially those less constrained organizationally and financially—to shift R&D expenditures and employment overseas, increase acquisitions for intellectual property, and consolidate industry market share. Conversely, firms that are organizationally or financially constrained reduced basic research, patenting efficiency, and were more likely to exit the market. These dynamics led to greater industry concentration and higher markups for firms better able to adjust, highlighting an unintended consequence of skilled immigration restrictions on innovation and market competition.