We examine the value of skilled immigrants in finance by exploiting two natural experiments. We find that hedge fund management companies that secure more H-1B visas in random lotteries deliver higher alphas, Sharpe ratios, and information ratios. Moreover, an unexpected reduction in the H-1B...

Using random H-1B visa lotteries as a natural experiment, we document that firms respond to shortages of high-skilled workers by acquiring firms that have such workers and own negligible amounts of tangible assets. Additional tests show that desire for the targets’ skilled labor is an...