Returning from overseas: STEMs migration and corporate digitalization

Abstract

This paper investigates the spillover effect of cross-border migration of STEMs from the U.S. on corporate digitalization. Using a sample of Chinese high-tech enterprises (HTEs), we find that the cross-border migration of STEMs promotes the HTEs' digitalization. The talent attraction effect from the labor market and the market competition effect from the product market are proven to be two crucial channels. Further tests show that the spillover effect is more pronounced in samples with lower labor adjustment cost, higher employee care, and better employment environment. Finally, the above effect contributes to the high-quality development of HTEs. This paper verifies the impact of cross-border migration of human capital on corporate digitalization from the perspective of labor incentives, we provide policy insights for policymaker to seize the opportunity to bring in overseas STEMs.