The Impact of Competitiveness on Brain Drain, GMM Panel Approach

Brain drain is one of the challenges that many countries have been facing for ages and it is considered as one of the most damaging issues in the countries. So far, economists have always emphasized and focused on the factors affecting brain drain, including economic growth, quality of innovation, human capital, unemployment rate of graduates, institutional quality, intellectual property rights, economic, political and civil liberties, political and social environment, inequality, and so on. The study of each of them, in turn, explains the causes of brain drain. But along with these factors, the effect of the power of competitiveness on brain drain, which has recently been taken into consideration by international communities, has been neglected and there have not yet been comprehensive studies on it. While competitiveness as a factor of attraction can increase the motivation and welfare of the elites and it ultimately prevents the elites from leaving the country by employing them in different parts of the country. In this regard, the purpose of this study is to investigate the effect of competitiveness on brain drain from selected Islamic countries to the USA during the period from 2007 to 2015 using the Generalized Method of Moments (GMM). The results of this study showed that the competitiveness index has a negative and significant effect on brain drain. Additionally, the indexes of welfare gap and real wage gap have respectively positive, significant and positive, and insignificant relationships with brain drain in the studied countries. The variable of unemployment rate also has a positive and significant relationship with the brain drain. According to the findings of the study, poor competitiveness in Islamic countries, which are mostly sending countries, is a repulsive factor that leads to a large exodus of elites from the above-mentioned countries. Therefore, it is suggested that politicians and managers of the Islamic countries pay more attention to the indicators of competitiveness in order to reduce the brain drain.