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The Consequences of Globalisation: India's Software Industry and Cross-border Labour Mobility -super-1

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Author Info

  • Simon Commander
  • Rupa Chanda
  • Mari Kangasniemi
  • L. Alan Winters

Abstract

The Indian software industry is a prime example of globalisation. The industry has been characterised by large cross-border mobility of its skilled labour force. Using a unique survey of Indian software firms, our paper quantifies the extent and impact of mobility on firm behaviour and performance. Cross-border labour mobility in the paper refers to both temporary and permanent labour flows by Indian software professionals. The picture that emerges is of a highly mobile world in which temporary mobility has been an important characteristic of the industry. A significant number of workers have work experience abroad in a developed country. Moreover, the share of skilled workers with such experience has been positively associated with the incidence of skilled migration from the firm. This suggests network effects are at work. In terms of the impact on performance - as measured by the change in turnover per worker and the change in the employment size of the firm - the paper finds little evidence of a robust adverse effect. Further, the evidence suggests that there have been important external effects at work, as through changes in the willingness of workers to acquire skills, as well as through increased provision of educational services. These have further abated the risk of a brain drain. However, the software industry may be rather different from other industries. Our results need to be interpreted as the outcome of a particular case of skilled migration and not one necessarily representative of all types of skilled migration and source sectors. Copyright 2007 The Authors.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 31 (2008)
Issue (Month): 2 (02)
Pages: 187-211

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Handle: RePEc:bla:worlde:v:31:y:2008:i:2:p:187-211

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Cited by:
  1. Ambrosini, J. William & Mayr, Karin & Peri, Giovanni & Radu, Dragos, 2012. "The Selection of Migrants and Returnees in Romania: Evidence and Long-Run Implications," IZA Discussion Papers 6664, Institute for the Study of Labor (IZA).
  2. Frédéric Docquier & Hillel Rapoport, 2011. "Globalization, Brain Drain and Development," Working Papers 2011-18, Department of Economics, Bar-Ilan University.
  3. Lema, Rasmus & Quadros, Ruy & Schmitz, Hubert, 2012. "Shifts in Innovation Power to Brazil and India: Insights from the Auto and Software Industries," MPRA Paper 49591, University Library of Munich, Germany.
  4. John Gibson & David Mckenzie, 2010. "The Economic Consequences of ‘Brain Drain’ of the Best and Brightest: Microeconomic Evidence from Five Countries," Working Papers in Economics 10/05, University of Waikato, Department of Economics.
  5. J. William Ambrosini & Karin Mayr & Giovanni Peri & Dragos Radu, 2011. "The Selection of Migrants and Returnees: Evidence from Romania and Implications," NBER Working Papers 16912, National Bureau of Economic Research, Inc.
  6. Mayr Karin & Peri Giovanni, 2009. "Brain Drain and Brain Return: Theory and Application to Eastern-Western Europe," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-52, November.

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