Return Migration and Distributed R&D in Multinationals – A Study Using Micro Data

Abstract:     
Is the phenomenon of multinational firms (MNCs) conducting distributed R&D across emerging markets related to the return migration of engineers and scientists from the U.S. to emerging markets? I hypothesize that local inventors at emerging market R&D centers of MNCs face constraints in securing resources from the headquarters for knowledge creation projects and that returnees can act as resource brokers. I then test for whether or not reporting to a returnee manager leads to higher patenting. I test this using hand-collected employment, travel, demographic and patent data for 1315 inventors at a Fortune 50 multinational R&D center in India. To account for endogenity and selection in measuring the impact of returnee managers, I consider new graduates, for whom manager assignment is plausibly random. I find that having a returnee manager leads to higher patenting. I also find support for the resource brokerage role of returnees - having a returnee manager leads to higher patenting but not higher headquarter co-patentees or patent citations back at the headquarters. In summary, this is one of the first empirical studies of return migration and multinationals using firm level micro data.

Number of Pages in PDF File: 47

Keywords: Return Migration, Knowledge Creation, Multinationals, R&D

JEL Classification: F23, O32, O31

working papers series