Immigration and Innovation in European Regions
The concentration of people with diverse socio-cultural backgrounds in particular geographic areas may boost the creation of new ideas, knowledge spillovers, entrepreneurship, and economic growth. In this paper we measure the impact of the size, skills, and diversity of immigration on the innovativeness of host regions. For this purpose we construct a panel of data on 170 regions in Europe (NUTS 2 level) for the periods 1991-1995 and 2001-2005. Innovation outcomes are measured by means of the number of patent applications per million inhabitants. Given the geographical concentration and subsequent diffusion of innovation activity, and the spatial selectivity of immigrants' location choices, we take account of spatial dependence and of the endogeneity of immigrant settlement in our econometric modelling. We use the location of McDonald's restaurants as a novel instrument for immigration. The results confirm that innovation is clearly a function of regional accessibility, industrial structure, human capital, and GDP growth. In addition, patent applications are positively affected by the diversity of the immigrant community beyond a critical minimum level. An increase in the fractionalization index by 0.1 from the regional mean of 0.5 increases patent applications per million inhabitants by about 0.2 percent. Moreover, the average skill level of immigrants (proxied by global regions of origin) also affects patent applications. In contrast, an increasing share of foreigners in the population does not conclusively impact on patent applications. Therefore, a distinct composition of immigrants from different backgrounds is a more important driving force for innovation than the sheer size of the immigrant population in a certain locality.
|Date of creation:||Apr 2011|
|Date of revision:|
|Publication status:||published in: P. Nijkamp, J. Poot J and M. Sahin (eds.) Migration Impact Assessment: New Horizons, Edward Elgar, 2012|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sari Pekkala Kerr & William R. Kerr, 2011.
"Economic Impacts of Immigration: A Survey,"
NBER Working Papers
16736, National Bureau of Economic Research, Inc.
- Richard Fabling & Steven Stillman & David C. Maré, 2011.
"Immigration and Innovation,"
11_05, Motu Economic and Public Policy Research.
- David Mare & Richard Fabling & Steven Stillman, 2011. "Immigration and Innovation," CReAM Discussion Paper Series 1110, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- Maré, Dave C. & Fabling, Richard & Stillman, Steven, 2011. "Immigration and Innovation," IZA Discussion Papers 5686, Institute for the Study of Labor (IZA).
- de Graaff, Thomas & Nijkamp, Peter, 2010. "Socio-economic impacts of migrant clustering on Dutch neighbourhoods: In search of optimal migrant diversity," Socio-Economic Planning Sciences, Elsevier, vol. 44(4), pages 231-239, December.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp5676. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.