Migration, Knowledge Diffusion and the Comparative Advantage of Nations

66 Pages Posted: 21 Mar 2016

See all articles by Dany Bahar

Dany Bahar

Brookings Institution; Harvard University - Center for International Development (CID)

Hillel Rapoport

Paris School of Economics (PSE)

Date Written: February 24, 2016

Abstract

Do migrants shape the dynamic comparative advantage of their sending and receiving countries? To answer this question we study the drivers of knowledge diffusion by looking at the dynamics of the export basket of countries, with particular focus on migration. The fact that knowledge diffusion requires direct human interaction implies that the international diffusion of knowledge should follow the pattern of international migration. This is what this paper documents. Our main finding is that migration, and particularly skilled immigration, is a strong and robust driver of productive knowledge diffusion as measured by the appearance and growth of tradable goods in the migrants’ receiving and sending countries. We find that a 10% increase in the stock of immigrants from countries exporters of a given product is associated with a 2% increase in the likelihood that the host country will start exporting that good “from scratch” in the following 10-year period. In terms of ability to expand the export basket of countries, a migrant with college education or above is about ten times more “effective” than an unskilled migrant. The results are robust to accounting for shifts in product-specific global demand, to excluding bilateral trade possibly generated by network effects, as well as to instrumenting for migration using a gravity model.

Keywords: migration, knowledge diffusion, comparative advantage, exports

JEL Classification: F140, F220, F620, O330, D830

Suggested Citation

Bahar, Dany and Rapoport, Hillel, Migration, Knowledge Diffusion and the Comparative Advantage of Nations (February 24, 2016). CESifo Working Paper Series No. 5769. Available at SSRN: https://ssrn.com/abstract=2752379

Dany Bahar

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

Harvard University - Center for International Development (CID)

One Eliot Street Building
79 JFK Street
Cambridge, MA 02138
United States

Hillel Rapoport (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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