H‐1B and L‐1 visa‐sponsored guest workers in the USA: An analysis of the strategic impact of Indian and other firms

• DOI: http://doi.org/10.1002/tie.22044
• Date: 01 July 2019
• Author: Arup Varma,Peter Norlander
• Published date: 01 July 2019

RESEARCH ARTICLE

H-1B and L-1 visa-sponsored guest workers in the USA: An

analysis of the strategic impact of Indian and other firms

Peter Norlander

1

| Arup Varma

2

1

Institute of Human Resources and

Employment Relations, Quinlan School of

Business, Loyola University Chicago, Chicago,

Illinois

2

Quinlan School of Business, Loyola University

Chicago, Chicago, Illinois

Correspondence

Peter Norlander, Institute of Human Resources

and Employment Relations, Quinlan School of

Business, Loyola University Chicago, 16 East

Pearson Street, Chicago, IL 60611.

Email: pnorlander@luc.edu

Organizational sponsors of guest workers to the United States claim foreign-born workers

enhance productivity and innovation. Drawing upon a unique dataset of all organizational spon-

sors of guest workers in the United States from 1993 to 2008, we find a 10% increase in guest

worker sponsorship is associated with a 2.2–3.1% increase in patenting within firms. Further-

more, we examine how organizational industry and country of origin are associated with the

effects of guest worker sponsorship on organization-level measures of innovation and produc-

tivity. Despite an overall within-firm positive association between sponsorship and patenting,

higher percentages of a firm’s workers on visas are associated with lower patenting, but higher

labor productivity. Firm-level industry and country of origin heterogeneity is significantly related

to the relationship between guest work sponsorship and both patent-related and nonpatent

investment in innovation such as research and development (R&D) expenditures. Semiconductor

firms and universities spend more on R&D in conjunction with guest worker sponsorship, while

semiconductor companies and hardware companies patent less. We discuss theoretical and

human resource implications, and offer suggestions for future research.

KEYWORDS

H-1 and L-1 visas, immigration, innovation, migration, patenting, skilled guest workers

1|INTRODUCTION

For skilled workers born outside of the United States, and for organi-

zations with U.S. operations that seek to take advantage of globaliza-

tion, work visa sponsorship through organizations is an opportunity to

achieve individual and firm objectives. One of the key questions

regarding these policies is the role of the organization that hires the

guest worker. Calls for more research on the organizations that are

heavy users of work visa programs (Kerr, Kerr, & Lincoln, 2014) and

the recruitment tools and tactics of firms that hire guest workers

(Lambert, Basuil, Bell, & Marquardt, 2017) point to gaps in knowledge

about the human resources strategies and the organizational context

of the firms that sponsor guest workers.

As Tung and Varma (2008) have argued, the movement of skilled

guest workers across borders is not a fad, and is likely to continue and

increase for the foreseeable future. As a case in point, using unique

data, we find over the last 15 years, more than 4 million skilled guest

workers have come to the United States under the two most popular

skilled guest worker programs, the H-1B and the L-1 visa. While the

H-1B program is designated for workers in “specialty occupations,”L-

1 visas allow international firms to transfer workers with “specialized

knowledge”to their U.S. worksites (see Depew, Norlander, &

Sorensen, 2017 for further details). Within the human resources (HR)

literature, authors have termed immigrants the “forgotten minority”

(see, for example, Binggeli, Dietz, & Krings, 2013). This is unfortunate,

as the international human resource management literature is full of

examples of the benefits that skilled guest workers (or, expatriates)

can bring to multinational corporations (see, for example, Au &

Fukuda, 2003; Elenkov & Manev, 2009). Indeed, scholars have been

paying close attention to the multidirectional movement of expatri-

ates, with a special focus on the adjustment experience (see, for

example, Varma & Russell, 2016) and related categorization by host

country nationals (HCNs), as it has been argued that HCN support can

be a critical determinant of expatriate adjustment and performance

(see, for example, Toh & DeNisi, 2005). In this connection, Varma,

Budhwar, and Pichler (2011) studied the experiences of expatriates in

China. Recently, Varma and colleagues (Varma, Hu, Budhwar, & Nor-

lander, 2018) investigated the adjustment experience of professional

DOI: 10.1002/tie.22044

Thunderbird Int. Bus. Rev. 2019;61:565–579. wileyonlinelibrary.com/journal/tie © 2019 Wiley Periodicals, Inc. 565