No Pennies for These Thoughts: International Labor Mobility and Knowledge Flow Externalities
37 Pages Posted: 3 Aug 2006
Date Written: June 2006
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: Suggested Citation