Brain Drain or Brain Bank? The Impact of Skilled Emigration on Poor-Country Innovation

32 Pages Posted: 29 Dec 2008  

Ajay Agrawal

University of Toronto - Rotman School of Management; National Bureau of Economic Research (NBER)

Devesh Kapur

University of Pennsylvania - Center for the Advanced Study of India; Center for Global Development

John McHale

Queen's School of Business

Date Written: December 2008

Abstract

The development prospects of a poor country depend in part on its capacity for innovation. The productivity of its innovators depends in turn on their access to technological knowledge. The emigration of highly skilled individuals weakens local knowledge networks (brain drain), but may also help remaining innovators access valuable knowledge accumulated abroad (brain bank). We develop a model in which the size of the optimal innovator diaspora depends on the competing strengths of co-location and diaspora effects for accessing knowledge. Then, using patent citation data associated with inventions from India, we estimate the key co-location and diaspora parameters; the net effect of innovator emigration is to harm domestic knowledge access, on average. However, knowledge access conferred by the diaspora is particularly valuable in the production of India's most important inventions as measured by citations received. Thus, our findings imply that the optimal emigration level may depend, at least partly, on the relative value resulting from the most cited compared to average inventions.

Suggested Citation

Agrawal, Ajay and Kapur, Devesh and McHale, John, Brain Drain or Brain Bank? The Impact of Skilled Emigration on Poor-Country Innovation (December 2008). NBER Working Paper No. w14592. Available at SSRN: https://ssrn.com/abstract=1320838

Ajay Agrawal (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Devesh Kapur

University of Pennsylvania - Center for the Advanced Study of India ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://www.sas.upenn.edu/casi/about/devesh.html

Center for Global Development

2055 L St. NW
5th floor
Washington, DC 20036
United States

John McHale

Queen's School of Business ( email )

99 University Avenue
Goodes Hall
Kingston, Ontario K7L 3N6
Canada

Paper statistics

Downloads
125
Rank
185,776
Abstract Views
1,938