Talent Flows and the Geography of Knowledge Production: Causal Evidence from Multinational Firms

Abstract

Leveraging a unique dataset merging patent data with all work-related migration reforms
that took place in 15 countries over 26 years, we show that reforms discouraging inventor
mobility decrease the patenting of MNE subsidiaries within a country, while reforms encouraging
it have a positive but much smaller effect. Additionally, reforms adopted in the U.S.
affect innovation in other countries in the opposite direction, highlighting the existence of a
global competition for talent. Finally, we find that policies easing migration have facilitated
about half of the shift in global innovation toward emerging markets.

Keywords: Migration, Patents, Technology, Policy Evaluation

JEL Classification: J61, K37, O33, O34, O38