The impact of educated migrants and R&D expenditures on innovation

Abstract Migration has become a topic of great interest of the 21st century, as it triggers multiple advantages and downsides, both for the people and communities implicated, depending on the policies in place. International migration should not be perceived as an issue that needs to be solved, but rather a global phenomenon that can reduce poverty and foster inclusive growth and sustainable development, both in origin and destination countries. The most highly-skilled immigrants represent a key factor in enhancing innovation and technological change processes, which are essential aspects of social and economic development. The purpose of the study is to analyse the impact of highly educated immigrants (with tertiary-educated immigrant employees and foreign PhD students) together with R&D investments on innovative activity (proxied by the number of patents applications), in the case of the ten countries which joined the EU in 2004. The evaluated time frame is from 2011 to 2017. For the econometric analysis of the panel data, we developed fixed-effects linear regression models, at the country-level. The indicators computed are relevant to the innovative activity. The econometric estimations highlight a positive correlation between educated migrants and the number of patent applications in all ten countries. This nexus is even strengthened when we take into consideration other relevant impact factors, such as investments in R&D and human capital. Therefore, the more efforts and investments are devoted to R&D and highly educated individuals, the more predictable the innovation is.