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Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital

Author

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  • Alessandra Venturini
  • Claudio Fassio
  • Sona Kalantaryan
Abstract
The objective of this paper is to analyse the role of migrants in innovation in Europe. We use Total Factor Productivity as a measure of innovation and focus on the three largest European countries – France, Germany and the United Kingdom – in the years 1994-2007. Unlike previous research, which mainly employs a regional approach, we analyse the link between migration and innovation at the sectoral level. This allows us to measure the direct contribution of migrants in the sector in which they are actually employed. Moreover, it allows a distinction between the real contribution of migrants to innovation from possible inter-sectoral complementarities, which might as well foster innovation. We control for the different components of human-capital, such as age, education and diversity of origin. To address the possible endogeneity of migration we draw on an instrumental variable strategy originally devised by Card (2001) and adapt it at the sector level The results show that overall migrants are relevant in all sectors, but some important differences emerge across sectors: highly-educated migrants show a larger positive effect in the high-tech sectors, while middle- and low-educated ones are more relevant in manufacturing. The diversity of countries of origin contributes to innovation only in the services sectors, confirming that in empirical analyses at the regional or national level the diversity measure might capture the complementarity between sectors rather than the contribution of different national skills and should not guide the migration policy which instead should follow the demand for labour not a general attraction highly skilled migrants.

Suggested Citation

  • Alessandra Venturini & Claudio Fassio & Sona Kalantaryan, 2015. "Human Resources and Innovation: Total Factor Productivity and Foreign Human Capital," Discussion Papers 29, Central European Labour Studies Institute (CELSI).
    • Handle: RePEc:cel:dpaper:29
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    Cited by:

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    2. Michael Landesmann & Sandra M. Leitner, 2018. "Immigration and Innovation," wiiw Working Papers 158, The Vienna Institute for International Economic Studies, wiiw.
    3. Andrea Goldstein & Alessia Amighini & Andrea Goldstein & Alessandra Venturini, 2016. "International Migration Policies: Should They Be A New G20 Topic?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(4), pages 93-110, July.
    4. Das, Gouranga Gopal & Marjit, Sugata & Kar, Mausumi, 2020. "The Impact of Immigration on Skills, Innovation and Wages: Education Matters more than where People Come from," Journal of Policy Modeling, Elsevier, vol. 42(3), pages 557-582.
    5. Stuhler, Jan & Jaeger, David & Ruist, Joakim, 2018. "Shift-Share Instruments and the Impact of Immigration," CEPR Discussion Papers 12701, C.E.P.R. Discussion Papers.
    6. Stela Zhivkova, 2016. "Sustainable Development and the Changes is the Modern Economic and Social Life," European Journal of Economics and Business Studies Articles, Revistia Research and Publishing, vol. 2, ejes_v2_i.

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    More about this item

    Keywords

    migration; innovation; highly skilled migrants; low skilled; migrants; patent;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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