Absorption of foreign knowledge: the impact of immigrants on firm productivity

TY - JOUR

T1 - Absorption of foreign knowledge: the impact of immigrants on firm productivity

AU - Bitzer, Jürgen

AU - Gören, Erkan

AU - Kruse-Becher, Sanne

PY - 2021/6/1

Y1 - 2021/6/1

N2 - What role do immigrants play in firms' ability to absorb and apply foreign knowledge? Based on a matched employer-employee dataset from Danish manufacturing firms over the period 2001-2011, this study examines the impact of foreign knowledge accessible by firms' immigrant employees on firm-level total factor productivity (TFP). We construct various firm-specific absorbable foreign knowledge measures that link firms' immigrant employees to the technological knowledge base of their country of origin. The empirical results suggest that firms employing immigrant employees have higher firm-level TFP outcomes and a higher probability of new firm-level patent applications. The average productivity gain associated with the hiring of one immigrant employee is about 1.5% in the year following the firm's hiring decision. Additional results show that the estimated productivity increase varies with the level of education and the occupational positions of the immigrant employees. The results are robust to the inclusion of a large range of firm-specific controls and various sensitivity checks.

AB - What role do immigrants play in firms' ability to absorb and apply foreign knowledge? Based on a matched employer-employee dataset from Danish manufacturing firms over the period 2001-2011, this study examines the impact of foreign knowledge accessible by firms' immigrant employees on firm-level total factor productivity (TFP). We construct various firm-specific absorbable foreign knowledge measures that link firms' immigrant employees to the technological knowledge base of their country of origin. The empirical results suggest that firms employing immigrant employees have higher firm-level TFP outcomes and a higher probability of new firm-level patent applications. The average productivity gain associated with the hiring of one immigrant employee is about 1.5% in the year following the firm's hiring decision. Additional results show that the estimated productivity increase varies with the level of education and the occupational positions of the immigrant employees. The results are robust to the inclusion of a large range of firm-specific controls and various sensitivity checks.

KW - CAPACITY

KW - CREATION

KW - DIFFUSION

KW - FRONTIER TECHNOLOGY

KW - INCREASE

KW - LABOR DIVERSITY

KW - MIGRATION

KW - NETWORKS

KW - RESEARCH-AND-DEVELOPMENT

KW - TRADE

UR - http://www.scopus.com/inward/record.url?scp=85121131178&partnerID=8YFLogxK

U2 - 10.1093/icc/dtaa047

DO - 10.1093/icc/dtaa047

M3 - Journal article

SN - 0960-6491

VL - 30

SP - 706

EP - 739

JO - Industrial and Corporate Change

JF - Industrial and Corporate Change

IS - 3

M1 - dtaa047

ER -