Cuadros, A., Navas, A. and Paniagua, J. (2022) Moving ideas across borders: foreign inventors, patents and FDI. World Economy. ISSN 0378-5920
Abstract
This paper explores the link between innovation, migration and Foreign Direct Investment (FDI) empirically within a theoretically consistent framework. It analyses how migrant inventors enhance multinational firms' adaptive innovation performance and ultimately foster FDI towards the migrant's country of origin. Foreign migrant inventors (migrants who filed a patent in their host country) possess a unique mix of technical knowledge and cultural background that contribute to adapting Research and Development (R&D) activities for foreign markets. Therefore, FDI increases in country-pair-sectors with specific endogenous investment in quality, which depends on the migrants in the R&D sector. We constructed a novel panel country-sector data set including FDI, patents and migrant inventors and applied a two-stage structural gravity estimation procedure using migrant inventors as a valid instrument for patents. The results show sizable effects on the extensive and intensive margins of greenfield FDI.
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2022 The Authors. The World Economy published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, (http://creativecommons.org/licenses/by-nc-nd/4.0/) which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made. |
Keywords: | foreign direct investment; gravity; migrant inventors; patents |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 21 Jun 2022 15:54 |
Last Modified: | 21 Jun 2022 15:54 |
Status: | Published online |
Publisher: | Wiley |
Refereed: | Yes |
Identification Number: | https://doi.org/10.1111/twec.13303 |
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