An executive order worth $100 billion: The impact of an immigration ban’s announcement on Fortune 500 firms’ valuation

I-129 Petition for a nonimmigrant worker blank form lies on United States flag with envelope from Department of Homeland Security close up


On June 22, 2020, President Trump issued an executive order (EO) that suspended new work visas, barring nearly 200,000 foreign workers and their dependents from entering the United States and preventing American companies from hiring skilled immigrants using H-1B or L-1 visas.

Exploiting this shock, and using event study methodology analyzing the cumulative average abnormal returns (CAARs) of Fortune 500 companies following this order, we find that the EO statistically and economically significantly caused negative CAARs of up to 0.45 percent, the equivalent of over $100 billion of losses, based on the firms’ valuation before the event. Our results are particularly pronounced for firms that had maintained or increased their reliance on skilled immigrant workers over the prior years.

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