Diaspora Externalities and Technology Diffusion

In this paper, we analyze how skilled migration contributes to TFP growth in the sending countries when diaspora effects in technology diffusion are introduced. To investigate this issue, we start from a previous paper by Vandenbussche, Aghion and Meghir (2006), who examine the contribution of human capital to economic growth theoretically and empirically. By using a panel dataset covering 19 OECD countries between 1960 and 2000, they show that a marginal increase in the stock of skilled human capital contributes to productivity growth the closer a state is to the technological frontier. In this framework, we also consider the impact of a positive externality in the adoption sector from skilled migration. By using a panel dataset covering 92 countries, including both developed and developing nations, between 1980 and 2000, we reconfi rm Vandenbussche et al.’s findings. Additionally, we show that migration increases growth in areas far from the frontier.