Knowledge spillovers through high-skilled migration network: evidence from OECD countries

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ABSTRACT We investigate the role of international high-skilled migrants in diffusing innovation from origin to destination countries by assessing their impact on the production of knowledge in host countries. Since better innovation performances can be mechanically correlated with a larger presence of high-skilled immigrants, we propose a new identification strategy to account for migrants’ self-selection into the migration network and sort out potential endogeneity bias. Our results, tested on a panel of 20 OECD countries (1987–2016), show that i) high-skilled migration magnifies the effect of internal knowledge in improving national innovation performances (while middle- or low-skilled migration flows have no statistically significant effect); ii) knowledge spillovers are stronger if origin and destination countries assign similar share of their public R&D budget across the same technological fields; iii) the contribution of high-skilled migrants is most valuable when host countries are relatively lagging behind in active research and innovation policies.