Moving ideas across borders: Foreign inventors, patents and FDI

Ana Cuadros, Antonio Navas and Jordi Paniagua ()

The World Economy, 2022, vol. 45, issue 12, 3652-3678

Abstract: This paper explores the link between innovation, migration and Foreign Direct Investment (FDI) empirically within a theoretically consistent framework. It analyses how migrant inventors enhance multinational firms' adaptive innovation performance and ultimately foster FDI towards the migrant's country of origin. Foreign migrant inventors (migrants who filed a patent in their host country) possess a unique mix of technical knowledge and cultural background that contribute to adapting Research and Development (R&D) activities for foreign markets. Therefore, FDI increases in country‐pair‐sectors with specific endogenous investment in quality, which depends on the migrants in the R&D sector. We constructed a novel panel country‐sector data set including FDI, patents and migrant inventors and applied a two‐stage structural gravity estimation procedure using migrant inventors as a valid instrument for patents. The results show sizable effects on the extensive and intensive margins of greenfield FDI.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/twec.13303

Related works:
Working Paper: Moving ideas across borders: Foreign inventors, patents and FDI (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:45:y:2022:i:12:p:3652-3678

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().