HRSDC-IC-SSHRC Skills Research Initiative

Working Paper Series

International Labour Mobility and Knowledge Flow Patterns
by Alexander Oettl and Ajay Agrawal.

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Abstract

Knowledge flows enhance firm productivity and economic growth. Prior research has found that knowledge flows are highly localized, and this finding has been partially attributed to social relationships that exist between co-located inventors. So, what happens to knowledge flows when inventors move? We find evidence that international labour mobility does indeed influence knowledge flow patterns. Specifically, we find that an immigrant inventor’s new country benefits from their arrival above and beyond the benefits enjoyed by the firm that recruited them; we refer to this phenomenon as “National Learning by Immigration.” Furthermore, our results suggest that the firm that lost the inventor also gains by receiving increased knowledge flows from that individual’s new firm and country, which we refer to as “Firm Learning from the Diaspora.” Moreover, we find that the latter effect is significantly stronger when the mover moves across borders but within the same multi-national firm.