Who with whom? Untangling the effect of high-skilled immigration on innovation[Shift-share designs: theory and inference]

I analyze how high-skilled immigration affects native, immigrant and collaborative innovation, using an IV approach that exploits exogenous variation in push factors of migration across origin regions and over time. The overall impact of high-skilled immigration on innovation is positive and substantial. High-skilled immigrants from developed regions of the world and with a PhD contribute by innovating themselves, enhancing native-immigrant and international collaborations, and spurring native innovation. I show that the latter effect is likely driven by the access to immigrants’ origin specific knowledge. In contrast, while there is no evidence for a significant direct contribution of high-skilled immigrants from less developed regions and without a PhD to innovation, they contribute indirectly, by stimulating native innovation.