Abstract 1

The study analyzes the effect of changes in migratory status on entrepreneurship through a policy intervention that made Venezuelan migrants in Colombia eligible for a resident visa. Causality is established by using an extension of a regression discontinuity design. The study found a positive effect on economic activity. However, it might not be precise on the mechanisms that are driving the results (for example, expanded access to credit, or subsidies?).

Summary Measures

We asked evaluators to give some overall assessments, in addition to ratings across a range of criteria. See the evaluation summary “metrics” for a more detailed breakdown of this. See these ratings in the context of all Unjournal ratings, with some analysis, in our data presentation here.2

Overall assessment: We asked evaluators to rank this paper “heuristically” as a percentile “relative to all serious research in the same area that you have encountered in the last three years.” We requested they “consider all aspects of quality, credibility, importance to knowledge production, and importance to practice.”2

Journal rank tier, normative rating (0-5): “On a ‘scale of journals’, what ‘quality of journal’ should this be published in? (See ranking tiers discussed here)” Note: 0= lowest/none, 5= highest/best”.

See here for the full evaluator guidelines, including further explanation of the requested ratings.

Written report3

Main claim and overall assessment

The main claim of the paper is that improvements in legal rights for immigrants can have a positive effect on entrepreneurship, measured as the likelihood of registering a new firm. I consider that given the economic method the authors use, an extension of a regression discontinuity (RD), they can identify a causal effect of receiving a visa on immigrant investment choices, and it gives a high internal validity. The authors do not find any significant differences between the treatment and control groups (Table 2), so receiving a visa is close to a random experiment. To assess the external validity of the paper, it might be important to understand the mechanism behind this effect. For example, does obtaining a visa in Colombia give access to a range of opportunities different than in other countries?

Overall, the paper tackles a highly important and relevant topic for global priorities research, because migration flows have increased during the last years. In particular, more than 7.7 [million] Venezuelans have abandoned their country since 2018, putting pressure on the countries that receive them, and Colombia is one of the main host countries.[1] Therefore, a better understanding of how to promote socioeconomic integration is relevant for policy design.

Summary

In this paper, the authors study a natural experiment in Colombia that made nearly 500 thousand undocumented Venezuelan immigrants eligible for a resident visa in 2019. The aim is to study the entrepreneurship behavior of immigrants upon receiving this visa. The authors used the Registro Administrativo de Migrantes Venezolanos (RAMV), a census of Venezuelan immigrants, linked to the complete formal business registry, Registro Único Empresarial (RUES).

The paper uses two empirical approaches: an extension of a regression discontinuity (RD) design and a panel data approach. The RD extension relies on the knowledge of how the running variable is constructed to identify a source of random variation in running variable scores. They then map this back to a probability that each observation lies above or below each threshold. In this case, the design uses variation in the running variable (coming from rain) to instrument for each person's choice to apply for a visa. This application of this approach is a contribution of the paper to the literature, and it offers an econometric technique that can be applied to a broader set of questions.

On the other hand, the paper uses a panel format. This approach offers an alternative approach to the RD strategy and allows the authors to compare differences in business formation between the physical relocation effect and the receipt of a legal residency permit (the visa effect).

The main results suggest that immigrants who received a legal migratory status increase their likelihood of registering a new firm by 1.2 to 1. 8 percentage points. The increase in economic activity is equivalent to that of native Colombians four years after the visa was received. Also, the effect of receiving a visa is over twice as large as the relocation effect. Finally, the authors find evidence that the firms created by the immigrants are a meaningful source of economic spillovers.

The paper contributes to our understanding of how legal rights can change the investment choices of immigrants, as observed in their entrepreneurship. Also, the paper contributes to the literature by showing the application of an extension of a RD design.

Major comments

1. It would be interesting to delve into the mechanism behind the results. The authors provide some discussion on page 9; however, they do not provide any empirical evidence of the possible channels. For the design of better migration policies, it is important to understand [which aspects of] access to legal rights [particularly] allows migrants [to] start a business. For example, credit possibilities, subsidies, or a lower uncertainty because of the possibility of signing contracts.

2. According to the panel data approach and the results in Figure 6, the statistically significant effect on firm creation happened until 2022, with a slight increase in 2021. So, what happened with these immigrants between 2018 and 2021?

3. It would be helpful to include in Tables 2 and 3 the number of observations in each group.

4. It would be nice to develop an analysis of the assets of the firm. According to page 11, for all firms in the data, the authors obtained the number of assets. This variable might provide useful information on the type of firm created. Also, it might offer some proxy for firm productivity.

5. I [would] move the explanation that “Weather data was unavailable for six municipalities” in footnote 25 before referring to Table A2. Otherwise, it might be confusing why the sample size in Table A2 is around 250 thousand.

6. Is there any evidence of a network effect, such that people hired by these firms are also Venezuelans? I am not sure if the data allows them to study this, but it might be interesting to analyze.

7. For future work, it could be relevant to analyze the life cycle of these firms. Are they more likely to survive than firms of native Colombians? Also, given the foreign nature of the entrepreneur, are these firms more likely to become importers or exporters?

Minor comments

1. On page 17, it reads “In some settings, the mean value Xi can could be interpreted.” It should be removed the “can” or “could”.

2. Capitalize the first letter in footnote 21.

3. When the authors explain notation in Equation 2, the index should be k, not i.

4. On Equation 4, should there be a coefficient next to the ExpectedDelayi? Also, the error term should be eta, not epsilon.

5. On page 28, it reads “The coefficient for ActualDelayi is positive and […]” However, it is negative (-0.0031).

6. Sometimes the paper talks about “Columbia,” it should be “Colombia” (see for example page 23).

References

[2]Pan American Health Organization (2023) “Increased migration flow in the Americas in 2023: Challenges for migrant health and PAHO's response.” Available at: https://www.paho.org/en/news/18-12-2023-increased-migration-flow-americas-2023-challenges-migrant-health-and-pahos-response

Evaluator details

1. How long have you been in this field?

   • 5 years.

2. How many proposals and papers have you evaluated?

   • About 10.