Foreign Students and the International Diffusion of Scientific and Technological Knowledge

Megan MacGarvie

Boston University and NBER

ExTra Workshop, EPFL Lausanne

September 30, 2006

Labor mobility and international knowledge diffusion

• Diffusion of scientific and technical knowledge geographically bounded (JTH, etc.)

• Trade and FDI explain diffusion of tech. knowledge (Branstetter, MacGarvie, Veugelers & Cassiman)

• Networks and labor mobility are related to trade and FDI patterns (Rauch, Combes et al)

• Networks and labor mobility are channels for knowledge diffusion (Breschi & Lissoni, Singh)

• What role does international labor mobility play in the diffusion of scientific and technical knowledge? (Agrawal et al, Kim et al, Trajtenberg et al, Kerr)

• Ultimate goal: use exogenous variation in the number of students studying in the U.S. and returning to home countries to identify effect of labor mobility on diffusion

Source: Bound, Turner and Walsh (2006), based on Survey of Earned Doctorates microdata

Internationalization of U.S. Doctoral Education in Science and Engineering

• Has the increase in foreign doctoral recipients in Science & Engineering led to an increase in the diffusion of knowledge:

a) From U.S. universities to foreign countries?b) From foreign countries to U.S. universities?c) Primarily through students who return to their home

countries?d) Or from those who remain in the U.S. as well?

• Contribution to the “brain drain” debate• Asks how U.S. is affected

a) By the increase in the foreign share of doctoral students (see also Stephan et al, Stuen et al)

b) as more foreign-born doctorates return to home countries

Brain Drain vs. “Brain circulation”• Saxenian (2002)

– Half of Silicon Valley immigrant entrepreneurs surveyed had set up subsidiaries, joint ventures or other business ventures in home countries

– More than 80 percent said they share information about technology with people back home.

• Agrawal, Cockburn and McHale (2006)– Mobile inventors cited disproportionately in prior locations

• Kerr (2006)– Foreign inventors 50% more likely to cite U.S.-based inventors of

the same ethnicity

Quantifying the extent of “brain circulation”• This paper uses patent citations and counts of students by

country and field to quantify knowledge diffusion to and from U.S. universities

• Preliminary evidence suggests:– a robust positive relationship between the number of

students moving abroad and foreign cites to U.S. university patents

– A positive but more limited effect on U.S. cites to foreign countries from inflows of foreign students

– Not much impact on knowledge flows to foreign countries when a larger share of expatriates remain in the U.S.

– Not much effect on U.S. cites to foreign countries when a larger share of foreign students move abroad

Data: NSF’s Survey of Earned Doctorates (SED)

• Annual data from 1958-2004

• Almost the universe of U.S. doctoral recipients; comprehensive data on demographic and educational characteristics

• Key information on students: – University– Field of study– citizenship; location of birth, high school and college – location of post-doctoral employment

Key foreign student variables:• Studmigijkt: number of students obtaining doctorates at

university i in field k and year t with plans to move to country j after graduation

• Forstudijkt: number of students obtaining doctorates at university i in field k and year t who were either born and attended high school, or attended both high school and college in country j

• Include ten years of lags

• Also control for the # of doctorates in S&E at university, the # of docs in the field at the university, and the # of docs from the country in the field.

Electrical Engineering Doctorates, by country of citizenship (log scale)

0.1

1

10

100

1000

Brazil

Canada

China

India

Japan

Taiwan

Russia

Computer Science & IS doctorates, by country of citizenship (log scale)

0.1

1

10

100

1000

Brazil

Canada

China

India

Japan

Taiwan

Russia

Biomedical Doctorates, by country of citizenship (log scale)

0.1

1

10

100

1000

Brazil

Canada

China

India

Japan

Taiwan

Russia

Physics Doctorates, by country of citizenship (log scale)

0.1

1

10

100

1000

Brazil

Canada

China

India

Japan

Taiwan

Russia

Data: NBER patent database • All US patents and citations (updated to 2002)• Key data items:

– Location of inventor– Technology class– Citations

• University patents identified via search of assignee names– Omits university-invented patents assigned to third parties– Mostly assigned at the university level for multi-campus

systems (i.e. state univs)…so counts of doctorates are rolled up

Key patent variables

• Dependent variables: – Bijkt: “Backward” citations by university i’s patents to

country j’s patents in field k and year t– Fijkt: “Forward” citations to university i’s patents by

country j’s patents in field k and year t

• Control variables:– Country's patents– University's Patents– Total citations to country's patents– Total citations to university’s patents– Technological proximity Proxijt = c (Pict Pjct)/ √(cPict

2)(cPjct2)

Field of Study IPC Class / HJT Category

Agricultural/Environmental Sciences

IPC A01 (agriculture; forestry; animal husbandry; hunting; trapping; fishing)

Biomedical sciences IPC A61 (medical or veterinary science;hygiene), C12M-C12S (biochemistry; microbiology; enzymology; mutation or genetic engineering); C07 (organic chemistry) / HJT 3 – Drugs & Medical

Mechanical engineering

IPC F01-F17 (mechanical engineering) / HJT 5 -- Mechanical

Chemistry and Chemical Eng. IPC C — chemistry; metallurgy / HJT 1 -- Chemical

Electrical Engineering

IPC H — electricity; G06 -- computing; calculating; counting / HJT 4 – Electrical & Electronic

Computer Science IPC G06 -- computing; calculating; counting / HJT 2 – Computers & Communications

Physics IPC G — physics

Fields of study mapped to patent classes

VariableMean Std.

Dev.Min. Max.

studmigjkt 0.0325 0.334 0 30

studmigjkt- 0.270 1.952 0 216

forstudjkt 0.0923 0.5665 0 36

forstudjkt- 0.693 3.56 0 256

Country's patents 308.95 980.317 1 11805

University's Patents 0.465 2.813 0 183

Total citations to country's patents 1397.396 5151.57 0 62272

Total number of doctorates in field k at university i

9.170 21.108 0 560

Total number of doctorates at university i 149.14 255.6 0 2806

Total number of doctorates in field k from country j

19.763 50.421 0 745

Descriptive statisticsUnit of observation is a university (i), country (j), field (k) and

year(t) combination

F.E. Poisson regression specifications

E[Bijkt | Xijkt]= exp(β’Xijkt) ; E[Fijkt | Xijkt] = exp(β’Xijkt)

’X sstudmigijkt- + fforstudijkt- + i + k + jt + Zijkt = 1 to 10

OR

’Xsln( studmigijkt- )+ f ln(forstudijkt- )+ i + k + jt + Zijkt

Z includes:Ln(Country’s patents), ln(university’s patents), Prox, ln(country’s fwd cites),

ln(university’s fwd cites), ln(# of doctorates in S&E at university), ln(# of docs in the field at the university), and ln(# of docs from the country in the field).

All Countries OECD Only

Regression w student variables measured in levels: _studmigt- -0.015*** -0.028**

(0.005) (0.014) _forstudt- 0.005 0.007**

(0.004) (0.003)Regression w student variables measured in logs:

Ln( studmigt-) -0.094*** -0.013(0.006) (0.011)

Ln( forstudt-) -0.021*** 0.037***(0.006) (0.012)

Knowledge Diffusion to U.S. Universities from foreign countries,University-country-year level analysis, 1987-2002

Poisson regression with university and country x year fixed effects included.

Control variables: country’s patents, university’s patents, country’s fwd cites, university’s fwd cites, prox, total students at univ, total students at

univ in field, total students in field from country.

All countries OECD Only

Regression w student variables measured in levels: _studmigt- 0.032*** 0.041***

(0.003) (0.010) _forstudt- -0.012*** -0.009

(0.002) (0.009)Regression w student variables measured in logs:

Ln( studmigt-) 0.044*** 0.079***(0.013) (0.009)

Ln( forstudt-) -0.033*** 0.006(0.011) (0.011)

Knowledge Diffusion from U.S. Universities to foreign countries,University-country-year level analysis, 1987-2002

Poisson regression with university and country x year fixed effects included.

Control variables: country’s patents, university’s patents, country’s fwd cites, university’s fwd cites, prox, total students at univ, total students at

univ in field, total students in field from country.

Backward citations regressed on lags of studmigijkt

(Poisson regression w ith university and country x year f ixed effects)

-0.02

-0.015

-0.01

-0.005

0

0.005

0.01

0.015

0.02

1 2 3 4 5 6 7 8 9 10

# of lags

_studmigijkt-

_studmigijkt-

Forward citations regressed on lags of studmigijkt

(Poisson regression w ith university and country x year fixed effects)

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

1 2 3 4 5 6 7 8 9 10

# of lags

_studmigijkt-

_studmigijkt-

Knowledge Diffusion to U.S. Universities from Foreign Countries, by type of institution and development level of the country

Fixed-effects Poisson Regression, dependent variable is the number of citations by university i in year t to patents in country j

Doctoral/Research Universities

Master's & Baccalaureate Universities

OECD countries

Non-OECD countries OECD

Non-OECD countries

_forstudt- 0.007* 0.003 -0.022 0.006

(0.004) (0.004) (0.046) (0.024)

Knowledge Diffusion from U.S. Universities to Foreign Countries, by type of institution and development level of the country

Fixed-effects Poisson Regression, dependent variable is the number of citations by patents in country j to university i in year t

Doctoral/Research Universities

Master's & Baccalaureate Universities

OECD countries

Non-OECD countries

OECD countries

Non-OECD countries

_studmigt- 0.040*** -0.021 -0.012 0.117 ***

(0.003) (0.013) (0.023) (0.053)

Interpreting the results

• Foreign countries cite more of a U.S. university’s patents when more Ph.D.s from the university move to those countries (controlling for the total number of students from that country receiving doctorates) …

= 0.08% in the OECD– Who in the foreign country is doing the citing?– Reverse causality & matching– Timing of diffusion

• Foreign countries do not cite more U.S. patents when they send more doctoral students to the U.S. (controlling for inflows of docs from the U.S.)

Interpreting the results

• Increases in the number of students from OECD countries receiving doctorates at a U.S. university are associated with increases in citations by U.S. universities to foreign patents– Again, is this picking up the “match” between universities?

• U.S. universities do not increase their citations to foreign patents when more doctorates move abroad

Next steps: I.V.s

• Identify effect of mobility using exogenous variation arising from:– Macroeconomic and political shocks

• Japanese recession; exchange rates

• East Germany & USSR

– Immigration reform act of 1990

– J-1 visas: foreign residency requirement

– Demographics??