How does large-scale internal migration affect innovation? Evidence from China

The influx of international and high-skilled migrants has profoundly promoted innovation in developed countries. However, few studies have investigated the effects of large-scale and various types of internal migrants on innovation in developing countries. With a surge in internal migration and innovation progress, China provides an excellent place and unique case to explore this issue. Using the predicted share of migrants as an instrumental variable for migration, this study examines the causal effects and mechanisms of internal migration on innovation in China from 2000 to 2015. Our results indicate that internal migration significantly promotes innovation in China. The promotion effects of migration are more pronounced among high-skilled, ‘urban hukou,’ and urban-urban migrants as well as in coastal areas, larger cities, and cities with higher levels of public services. Migrants can broaden the local human capital stock, enhance cultural diversity, and improve skill complementarity in their destination areas, thereby facilitating innovation. This study highlights the contribution of various types of internal migrants to innovation in China, which differs significantly from previous studies on international migrants in developed countries. These findings provide new insight into migration and innovation and offer references for other developing countries to formulate sustainable migration and innovation policies.