This study aims to investigate the international implications of the 2025 US H-1B visa reform, which introduced an unprecedented US$100,000 application fee for new petitions. Conceptualizing immigration policy as a Talent Mobility Barrier (TMB), this research examines how this institutional shock influenced the financial performance and strategic behavior of Indian multinational enterprises (MNEs) operating in knowledge-intensive sectors.
A mixed-method design was used, combining event-study analysis, a difference-in-differences framework and qualitative inquiry. The quantitative component estimated short-term abnormal stock returns for 48 listed Indian MNEs, distinguishing between firms with high and low US revenue dependence. To enrich the econometric results, 20 semi-structured executive interviews were analyzed through open, axial and selective coding, providing deeper insights into organizational adaptation under policy-induced uncertainty.
Firms with high exposure to the US market experienced significant and sustained negative abnormal returns, while diversified firms demonstrated greater resilience. Qualitative findings revealed five adaptive mechanisms—strategic localization, automation as a structural substitute for mobility, client reassurance initiatives, diversification of global talent pipelines, and policy entrepreneurship through lobbying. Collectively, these findings demonstrate that immigration restrictions operate as non-tariff barriers to talent mobility, reshaping both financial outcomes and strategic responses.
This study advances international business theory by conceptualizing immigration restrictions as TMB and integrating the Resource-Based View, Conservation of Resources theory, and sociomateriality to explain dynamic substitution of constrained human capital. This study further identifies policy entrepreneurship as a distinctive strategic capability through which emerging market multinationals actively influence host-country institutions.
