Brain Drain or Brain Circulation: Evidence from OECD's International Migration and R&D Spillovers

Abstract

This paper empirically investigates whether labour mobility can transfer technology across borders based on the panel cointegration method. Estimates of specifications on a cross-section of 19 OECD countries during 1980-1990 lend strong support to this thesis. Data indicate that international labour movement may help transfer technology across borders in both directions: from donor countries to host countries and vice versa. This suggests that migration may more likely create a brain circulation rather than a brain drain. In addition, human capital has a significant impact on the research and development (R&D) diffusion process as it enhances a country's capacity to learn from a foreign technology base.