Do Foreign Experts Increase the Productivity of Domestic Firms?

44 Pages Posted: 9 Oct 2011

See all articles by Nikolaj Malchow-Moeller

Nikolaj Malchow-Moeller

Copenhagen Business School - Center for Economic and Business Research (CEBR); University of Southern Denmark

Jakob Roland Munch

University of Copenhagen - Department of Economics; Center for Economic and Business Research (CEBR)

Jan Rose Skaksen

Copenhagen Business School - Department of Economics; IZA Institute of Labor Economics

Abstract

While most countries welcome (and some even subsidise) high-skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts may impact on the productivity and wages of domestic firms. Using matched worker-firm data from Denmark and a difference-indifferences matching approach, we then find that firms that hire foreign experts – defined as employees eligible for reduced taxation under the Danish "Tax scheme for foreign researchers and key employees" – both become more productive (pay higher wages) and increase their exports of goods and services.

Keywords: foreign experts, export, immigrants, productivity, difference-in-differences matching

JEL Classification: F22, J24, J31, J61, L2

Suggested Citation

Malchow-Moeller, Nikolaj and Munch, Jakob Roland and Skaksen, Jan Rose, Do Foreign Experts Increase the Productivity of Domestic Firms?. IZA Discussion Paper No. 6001. Available at SSRN: https://ssrn.com/abstract=1941153

Nikolaj Malchow-Moeller (Contact Author)

Copenhagen Business School - Center for Economic and Business Research (CEBR) ( email )

Solbjerg Plads 3
Copenhagen, DK-2000
Denmark

University of Southern Denmark

Campusvej 55
DK-5230 Odense, 5000
Denmark

Jakob Roland Munch

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 35323019 (Phone)
+45 35323000 (Fax)

HOME PAGE: http://www.econ.ku.dk/Faculty_And_Staff/showID.asp?profile_id=1260

Center for Economic and Business Research (CEBR)

Porcelaenshaven, Bldg 65
DK-2000 Frederiksberg
Denmark

Jan Rose Skaksen

Copenhagen Business School - Department of Economics ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark
+45 38152582 (Phone)
+45 3815 2576 (Fax)

HOME PAGE: http://old.cbs.dk/staff/janroseskaksen/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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