TY - JOUR

T1 - Do Foreign Experts Increase the Productivity of Domestic Firms?

AU - Malchow-Møller, Nikolaj

AU - Munch, Jakob Roland

AU - Skaksen, Jan Rose

PY - 2017/10/5

Y1 - 2017/10/5

N2 - While most countries welcome (and some even subsidize) high‐skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts can affect the productivity and wages of domestic firms. Using matched worker–firm data from Denmark and a matching difference‐in‐differences approach, we then find that firms that hire foreign experts instead of domestic experts become more productive, in the sense that they pay higher wages to high‐skilled co‐workers.

AB - While most countries welcome (and some even subsidize) high‐skilled immigrants, there is very limited evidence of their importance for domestic firms. To guide our empirical analysis, we first set up a simple theoretical model to show how foreign experts can affect the productivity and wages of domestic firms. Using matched worker–firm data from Denmark and a matching difference‐in‐differences approach, we then find that firms that hire foreign experts instead of domestic experts become more productive, in the sense that they pay higher wages to high‐skilled co‐workers.

KW - immigrants

KW - matching difference-in-differences

KW - STEM workers

U2 - 10.1111/sjoe.12286

DO - 10.1111/sjoe.12286

M3 - Journal article

VL - 121

SP - 517

EP - 546

JO - Scandinavian Journal of Economics

JF - Scandinavian Journal of Economics

SN - 0347-0520

IS - 2

ER -