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Brain drain, R&D-cost differentials and the innovation gap

  • Fabio Mariani

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

This paper aims at explaining why countries with comparable levels of education still experience notable differences in terms of R&D and innovation. High-skilled migration, ultimately linked to differences in R&D costs, might be responsible for the persistence of such a gap. In fact, in a model where human capital accumulation and innovation are strategic complements, we show that allowing labor outflows may strengthen educational incentives in the lagging economy if migration is probabilistic in nature, but at the same time reduces the share of innovative production. Income (growth) might be consequently affected, and a positive migration chance is very unlikely to act as a substitute for educational subsidies.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00308746.

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Date of creation: 2008
Date of revision:
Publication status: Published, Recherches Economiques de Louvain - Louvain Economic Review, 2008, 74, 3, 251-272
Handle: RePEc:hal:cesptp:halshs-00308746
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00308746
Contact details of provider: Web page: http://hal.archives-ouvertes.fr/

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  1. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, vol. 103(3), pages 441-63, August.
  2. Acemoglu, D., 1994. "Search in the Labor market: Incomplete Contracts and Growth," Working papers 94-23, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. DOCQUIER, Frédéric & FAYE, Ousmane & PESTIEAU, Pierre, . "Is migration a good substitute for education subsidies?," CORE Discussion Papers RP -2022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Beine, Michel & Docquier, Frederic & Rapoport, Hillel, 2001. "Brain drain and economic growth: theory and evidence," Journal of Development Economics, Elsevier, vol. 64(1), pages 275-289, February.
  5. Benoit Mulkay & Bronwyn H. Hall & Jacques Mairesse, 2000. "Firm Level Investment and R&D in France and the United States: A Comparison," NBER Working Papers 8038, National Bureau of Economic Research, Inc.
  6. Stark, Oded & Wang, Yong, 2001. "Inducing Human Capital Formation: Migration as a Substitute for Subsidies," Economics Series 100, Institute for Advanced Studies.
  7. Janeba, Eckhard, 1998. "Tax competition in imperfectly competitive markets," Journal of International Economics, Elsevier, vol. 44(1), pages 135-153, February.
  8. Guido Cozzi, 2003. "The Self-fulfilling International Allocation of Innovation," Levine's Bibliography 666156000000000189, UCLA Department of Economics.
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