Human Mobility and the Globalization of Knowledge Production : Causal Evidence from Multinational Enterprises

We investigate how reforms that ease or restrict human mobility affect global innovation. We leverage a unique dataset merging patent data with exhaustive information on business-related migration reforms that take place in 15 countries over 26 years, and employ a novel event study approach. Our results show that reforms favoring inventor mobility increase the patenting, including global collaborations, of MNEs within a country, while the opposite is true for reforms discouraging inventor mobility. Further, we show that positive migration reforms partly explain the increasing share of global knowledge production by countries with low initial patenting observed over the past decades. This suggests that policies affecting human mobility contributed to the global shift in the geography of innovation towards emerging markets