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Do Foreign Experts Increase the Productivity of Domestic Firms?

  • Malchow-Møller, Nikolaj

    ()

    (University of Southern Denmark)

  • Munch, Jakob R.

    ()

    (University of Copenhagen)

  • Skaksen, Jan Rose

    ()

    (Copenhagen Business School)

While most countries welcome (and some even subsidise) high-skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts may impact on the productivity and wages of domestic firms. Using matched worker-firm data from Denmark and a difference-indifferences matching approach, we then find that firms that hire foreign experts – defined as employees eligible for reduced taxation under the Danish "Tax scheme for foreign researchers and key employees" – both become more productive (pay higher wages) and increase their exports of goods and services.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6001.

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Length: 44 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:iza:izadps:dp6001
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