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Do Foreign Experts Increase the Productivity of Domestic Firms?

Author

Listed:
  • Nikolaj Malchow-Møller

    (University of Southern Denmark and CEBR)

  • Jakob R. Munch

    (University of Copenhagen and CEBR)

  • Jan Rose Skaksen

    () (Copenhagen Business School and CEBR)

Abstract

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-in-differences 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.

Suggested Citation

  • Nikolaj Malchow-Møller & Jakob R. Munch & Jan Rose Skaksen, 2011. "Do Foreign Experts Increase the Productivity of Domestic Firms?," Norface Discussion Paper Series 2011014, Norface Research Programme on Migration, Department of Economics, University College London.
  • Handle: RePEc:nor:wpaper:2011014
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jürgen Bitzer & Erkan Gören & Sanne Hiller, 2014. "International Knowledge Spillovers: The Benefits from Employing Immigrants," Working Paper Series in Economics 323, University of Lüneburg, Institute of Economics.
    2. Nathan, Max, 2013. "The Wider Economic Impacts of High-Skilled Migrants: A Survey of the Literature," IZA Discussion Papers 7653, Institute for the Study of Labor (IZA).
    3. Jürgen Bitzer & Erkan Gören & Sanne Hiller, 2015. "Absorption of Foreign Knowledge: Firms’ Benefits of Employing Immigrants," Working Papers V-386-15, University of Oldenburg, Department of Economics, revised Oct 2015.
    4. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, Elsevier.
    5. Bonin, Holger, 2017. "Report No. 75: The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute for the Study of Labor (IZA).
    6. Mette Foged & Giovanni Peri, 2016. "Immigrants' Effect on Native Workers: New Analysis on Longitudinal Data," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 1-34, April.

    More about this item

    Keywords

    Foreign experts; export; immigrants; productivity; difference-in-differences matching;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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