No Pennies for These Thoughts: International Labor Mobility and Knowledge Flow Externalities

37 Pages Posted: 3 Aug 2006

See all articles by Alexander Oettl

Alexander Oettl

Georgia Institute of Technology - Strategic Management Area

Ajay Agrawal

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

Date Written: June 2006

Abstract

Although knowledge flows create value, they are often not priced. We examine "unintended" knowledge flows that result from the cross-border movement of inventors (flows that result from the move but do not go to the hiring firm). We find that the inventor's new country benefits from their arrival above and beyond the knowledge flow benefits enjoyed by the firm that recruited them (National Learning by Immigration). Furthermore, the firm that lost the inventor also gains by receiving increased knowledge flows from that individual's new country and firm (Firm Learning from the Diaspora). Surprisingly, the latter effect is only twice as strong when the mover moves within the same multi-national firm, suggesting that knowledge flows between inventors do not necessarily follow organizational boundaries, thus creating opportunities for public policy and firm strategy.

Keywords: labor mobility, knowledge flows, immigration, diaspora, inventors

JEL Classification: O31, O34

Suggested Citation

Oettl, Alexander and Agrawal, Ajay, No Pennies for These Thoughts: International Labor Mobility and Knowledge Flow Externalities (June 2006). Available at SSRN: https://ssrn.com/abstract=920930 or http://dx.doi.org/10.2139/ssrn.920930

Alexander Oettl (Contact Author)

Georgia Institute of Technology - Strategic Management Area ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Ajay Agrawal

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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