Migration, Innovation and Growth in the European Union
Keywords:
PhD foreign students, Innovation, R&D expenditures, European countriesAbstract
In today's globalised world, international migration represents one of the most important topics of the 21st century, with diverse effects on a country's economic, political, and social dimensions. Depending on how well government actors succeed to manage these flows, the positive effects can be further boosted, while the adverse effects can be diminished (for both receiving and sending countries). A great deal of attention must be paid to policy strategies that foster domestic investments and innovation, as they represent a meaningful engine of economic growth, influencing positively and significantly the income in the long run. This research aims to evaluate the influence of human capital (with a focus on foreign human resources), innovation activities and investments (finance and support) on per capita economic growth (proxied by GDP per capita), in the case of all the European Union countries. The timeframe is between 2014 and 2021. For the econometric analysis of the panel data, we used Fixed-Effects regression and System GMM approach (both short-run and long-run estimations). The econometric results emphasise the positive and statistically significant effects (both on short-run and long-run) of foreign PhD students, patent applications, resource productivity, employment in innovative enterprises and tertiary educated people on per capita economic growth. The coefficients of the independent variables were higher in the long run than in the short run. Therefore, in the long run, a one standard deviation improvement in variables: foreign PhD students and patent applications lead to a 0.014-fold, respectively 0.088-fold increase in the logarithm GDP per capita.
References
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Lazear, E. P. (1999). Globalisation and the Market for Team-Mates. The Economic Journal, 109(454), 15–40.
Leiponen, A. (2005). Skills and innovation. International Journal of Industrial Organization, 23(5-6), 303–323.
Maradana, R.P., Pradhan, R.P., Dash, S., Gaurav, K., Jayakumar, M., & Chatterjee, D. (2017). Does innovation promote economic growth? Evidence from European countries. Journal of Innovation and Entrepreneurship, 6(1).
Martin, P. & Zürcher, G. (2008). Managing migration: The global challenge. Population Bulletin, 63(1).
Miguelez, E., & Noumedem Temgoua, C. (2020). Inventor migration and knowledge flows: A two-way communication channel?. Research Policy, 49(9), 103914.
Mohnen, P., & Roller, L. H. (2005). Complementarities in innovation policy. European Economic Review, 49(5), 1431–1450.
Nickell, S.J. (1981). Biases in dynamic models with fixed effects. Econometrica 49(6), 1417-1426.
Parsons, R. A. (2015). The impact of age on innovation. Management Research Review, 38(4), 404–420.
Peri, G. (2012). The Effect of Immigration On Productivity: Evidence From US States. The Review of Economics and Statistics, 94(1), 348–358.
Peri, G. (2016). Immigrants, productivity, and labor markets. Journal of Economic Perspectives, 30(4), 3–30.
Poot, J. (2008). Demographic change and regional competitiveness: the effects of immigration and ageing. International Journal of Foresight and Innovation Policy, 4(1/2), 129-145.
Roodman, D. (2009). How to do Xtabond2: An Introduction to Difference and System GMM in Stata. The Stata Journal: Promoting Communications on Statistics and Stata, 9(1), 86–136.
Romer, P. M. (1990). Endogenous technological change. The Journal of Political Economy, 98(5), Part 2: The problem of development: A Conference of the institute for the study of free enterprise systems, 71-102.
Schankerman, M., & Pakes, A. (1985). Estimates of the Value of Patent Rights in European Countries During the Post-1950 Period. Economic Journal, Royal Economic Society, 96(384), 1052-1076.
United Nations Department of Economic and Social Affairs, Population Division (2020). International Migration 2020 Highlights (ST/ESA/SER.A/452).
Van Hear, N., Bakewell, O., & Long, K. (2017). Push-pull plus: reconsidering the drivers of migration. Journal of Ethnic and Migration Studies, 44(6), 927–944.
Venturini, A., Montobbio, Fabio., & Fassio, Claudio. (2012). Are migrants spurring innovation?. Migration Policy Center Research Report 2012/11.
World Intellectual Property Organization (WIPO). (2021, January). Retrieved from https://www3.wipo.int/ipstats/index.htm?tab=patent
Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277.
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of Econometrics, 68(1), 29–51.
Biavaschi, C., Burzyński, M., Elsner, B., & Machado, J. (2020). Taking the skill bias out of global migration. Journal of Development Economics, 142, 102317.
Black, R., Adger, W. N., Arnell, N. W., Dercon, S., Geddes, A., & Thomas, D. (2011). The effect of environmental change on human migration. Global Environmental Change, 21(1), 3–11.
Bodvarsson, Ö. B., & Van den Berg, H. (2013). The Determinants of International Migration: Theory. In: The Economics of Immigration: Theory and Policy. Springer, 27-57.
Boeri, T., Brucker, H., Docquier, F., & Rapoport, H. (2012). Brain Drain and Brain Gain: The Global Competition to Attract High-skilled Migrants. Oxford: Oxford University Press.
Borjas, G. J. (2003). The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market. The Quarterly Journal of Economics, 118(4), 1335–1374.
Bottazzi, L., & Peri, G. (2003). Innovation and spillovers in regions: Evidence from European patent data. European Economic Review, 47(4), 687–710.
Boubtane, E., Dumont, J.-C., & Rault, C. (2016). Immigration and economic growth in the OECD countries 1986–2006. Oxford Economic Papers, 68(2), 340–360.
Bove, V., & Elia, L. (2017). Migration, Diversity, and Economic Growth. World Development, 89, 227–239.
Cerna, L., & Czaika, M. (2016). European Policies to Attract Talent: The Crisis and Highly Skilled Migration Policy Changes. In: Triandafyllidou, A., & Isaakyan, I. (Eds.). High-Skill Migration and Recession. Migration, Diasporas and Citizenship. Palgrave Macmillan, London.
Chellaraj, G., Maskus, K. E., & Mattoo, A. (2006). Skilled Immigrants, Higher Education, and U.S. Innovation. In Ozden, C., & Schiff, M. (Eds.). International Migration, Remittances, and the Brain Drain. The World Bank and Palgrave Macmillan, 245-259.
Cinnirella, F., & Streb, J. (2017). The role of human capital and innovation in economic development: evidence from post-Malthusian Prussia. Journal of Economic Growth, 22(2), 193–227.
Clark, W. A. V., & Lisowski, W. (2019). Extending the human capital model of migration: The role of risk, place, and social capital in the migration decision. Population, Space and Place, 25(4), e2225.
Diebolt, C., & Hippe, R. (2018). The long-run impact of human capital on innovation and economic development in the regions of Europe. Applied Economics, 1–22.
Dima, B., Dima, S.M., & Lobont, O.-R. (2013). New empirical evidence of the linkages between governance and economic output in the European Union. Journal of Economic Policy Reform, 16(1), 68–89.
Dima, B., Dinca, M.S., Dima, S.M., & Dinca, G. (2017). Does economic policies uncertainty affect economic activity? Evidences from the United States of America. Romanian Journal of Economic Forecasting, 20(1), 60-74.
Djiofack, C.Z., Djimeu, E.W., & Boussichas, M. (2013). Impact of qualified worker emigration on poverty: A macro-micro-simulation approach for an African economy. Journal of African Economies, 23(1), 1–52.
Docquier, F., & Machado, J. (2016). Global Competition for Attracting Talents and the World Economy. The World Economy, 39(4), 530–542.
European Innovation Scoreboard Edition 2021. (2021, July). Retrieved from https://interactivetool.eu/EIS/EIS_2.html#a
Ferrucci, E., & Lissoni, F. (2019). Foreign inventors in Europe and the United States: Diversity and patent quality. Research Policy, 48(9), 103774.
Feyrer, J. (2008). Aggregate evidence on the link between age structure and productivity. Population and Development Review, 34, 78–99.
Fontana, R., Nuvolari, A., Shimizu, H., & Vezzulli, A. (2013). Reassessing patent propensity: Evidence from a dataset of R&D awards. Research Policy, Elsevier, 42(10), 1780-1792.
Foresti, M. & Hagen-Zanker, J. with Dempster, H. (2018). Migration and development: How human mobility can help achieve the sustainable development goals. In Migration and the 2030 Agenda for Sustainable Development (pp. 5-13). Overseas Development Institute.
Furman, J. L., Porter, M. E., & Stern, S. (2002). The determinants of national innovative capacity. Research Policy, 31(6), 899–933.
Gagliardi, L. (2014). Does skilled migration foster innovative performance? Evidence from British local areas. Papers in Regional Science, 94(4), 773–794.
Gelb S. & Krishnan, A. (2018). Technology, migration and the 2030 agenda for sustainable development. In Migration and the 2030 Agenda for Sustainable Development (pp. 181-198). Overseas Development Institute.
Griliches, Z., Pakes, A., & Hall, B. (1986). The Value of Patents as Indicators of Inventive Activity. In Dasgupta, P., & Stoneman, P. (Eds.), Economic Policy and Technical Performance. Cambridge University Press, 97-124.
Griliches, Z. (1990). Patent Statistics as Economic Indicators: A survey. Journal of Economic Literature, 28, 287–343.
Hagedoorn, J., & Cloodt, M. (2003). Measuring innovative performance: is there an advantage in using multiple indicators?. Research Policy, 32(8), 1365–1379.
Hong, L., & Page, S. E. (2004). Groups of diverse problem solvers can outperform groups of high-ability problem solvers. Proceedings of the National Academy of Sciences, 101(46), 16385–16389.
International Organization for Migration. (2016). The Push and Pull Factors of Asylum-Related Migration: A Literature Review.
International Organization for Migration. (2018). Migration and the 2030 agenda: A guide for practitioners. Retrieved from https://publications.iom.int/books/migration-and-2030-agenda-guide-practitioners
Koczan, Z., Peri, G., Pinat, M., & Rozhkov, D. (2021). The Impact of International Migration on Inclusive Growth: A Review. IMF Working Paper, 88.
Lazear, E. P. (1999). Globalisation and the Market for Team-Mates. The Economic Journal, 109(454), 15–40.
Leiponen, A. (2005). Skills and innovation. International Journal of Industrial Organization, 23(5-6), 303–323.
Maradana, R.P., Pradhan, R.P., Dash, S., Gaurav, K., Jayakumar, M., & Chatterjee, D. (2017). Does innovation promote economic growth? Evidence from European countries. Journal of Innovation and Entrepreneurship, 6(1).
Martin, P. & Zürcher, G. (2008). Managing migration: The global challenge. Population Bulletin, 63(1).
Miguelez, E., & Noumedem Temgoua, C. (2020). Inventor migration and knowledge flows: A two-way communication channel?. Research Policy, 49(9), 103914.
Mohnen, P., & Roller, L. H. (2005). Complementarities in innovation policy. European Economic Review, 49(5), 1431–1450.
Nickell, S.J. (1981). Biases in dynamic models with fixed effects. Econometrica 49(6), 1417-1426.
Parsons, R. A. (2015). The impact of age on innovation. Management Research Review, 38(4), 404–420.
Peri, G. (2012). The Effect of Immigration On Productivity: Evidence From US States. The Review of Economics and Statistics, 94(1), 348–358.
Peri, G. (2016). Immigrants, productivity, and labor markets. Journal of Economic Perspectives, 30(4), 3–30.
Poot, J. (2008). Demographic change and regional competitiveness: the effects of immigration and ageing. International Journal of Foresight and Innovation Policy, 4(1/2), 129-145.
Roodman, D. (2009). How to do Xtabond2: An Introduction to Difference and System GMM in Stata. The Stata Journal: Promoting Communications on Statistics and Stata, 9(1), 86–136.
Romer, P. M. (1990). Endogenous technological change. The Journal of Political Economy, 98(5), Part 2: The problem of development: A Conference of the institute for the study of free enterprise systems, 71-102.
Schankerman, M., & Pakes, A. (1985). Estimates of the Value of Patent Rights in European Countries During the Post-1950 Period. Economic Journal, Royal Economic Society, 96(384), 1052-1076.
United Nations Department of Economic and Social Affairs, Population Division (2020). International Migration 2020 Highlights (ST/ESA/SER.A/452).
Van Hear, N., Bakewell, O., & Long, K. (2017). Push-pull plus: reconsidering the drivers of migration. Journal of Ethnic and Migration Studies, 44(6), 927–944.
Venturini, A., Montobbio, Fabio., & Fassio, Claudio. (2012). Are migrants spurring innovation?. Migration Policy Center Research Report 2012/11.
World Intellectual Property Organization (WIPO). (2021, January). Retrieved from https://www3.wipo.int/ipstats/index.htm?tab=patent
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2022-05-14
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Migration, Innovation and Growth in the European Union. (2022). Timisoara Journal of Economics and Business, 14(2), 159-179. https://www.tjeb.ro/index.php/tjeb/article/view/348
