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Trump’s H-1B ban may have shaved $100 billion off America’s biggest firms

U.S. President Donald Trump holds a campaign event, in Lititz, Pennsylvania
Reuters/Leah Millis
How much damage has he done?
  • Ananya Bhattacharya
By Ananya Bhattacharya

Tech reporter


The Donald Trump administration’s decision to temporarily suspend the H-1B visa programme has taken a toll on the valuations of several large American companies.

The cumulative average abnormal returns (CAARs) of 471 companies from the Fortune 500 list dropped by 0.45%—equivalent to over $100 billion—in the 10 days after the order to halt H-1B was signed on June 22, according to a new study (pdf). The CAAR is used to measure the effect of lawsuits, buyouts, and other events.

The study was conducted by Brookings Institute’s Dany Bahar, Harvard Business School’s Prithwiraj Choudhury, and Britta Glennon from the University of Pennsylvania’s Wharton Business School.

The June order has barred nearly 200,000 foreign workers and their dependents from entering the US, making it harder for American companies to hire skilled immigrants.


The impact was most pronounced for the financial, information technology, and real estate (FIRE) sectors, the study published in the National Bureau of Economic Research found.

Nearly seven in 10 H-1B visas go to computer science professionals each year. Tech behemoths like Amazon, Apple, Facebook, Microsoft, Netflix, and Twitter have spoken out against Trump’s decision.

The H-1B connection

The impact on companies varied based on how dependent they were on the H-1B.

The researchers compared 295 firms with steady or positive growth in labor condition applications (LCAs)—a pre-requisite to apply for an H-1B visa–versus 196 with negative growth in LCAs. The former group was hit twice as hard as the latter.


Five trade organisations, the National Association of Manufacturers, the US Chamber of Commerce, the National Retail Federation, bipartisan network of tech execs Technet, and cultural exchange programmes sponsor Intrax had sued the government over its decision. In early October, a San Francisco judge said Trump “exceeded his authority” and even ordered an immediate hold visa restrictions in October. The order only applied to members of the organisations that brought the lawsuit.

“Over the medium to long term, it is conceivable that firms respond to this shock by engaging in the process of allocating resources across geographies,” the researchers wrote. “While there may be such long-run adjustments that firms can make when access to skilled labor supply is abruptly constrained, we document that there is a significant short-run negative impact.”

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