Processing immigration shocks: Firm responses on the innovation margin

• 成果类型: Article
• 署名作者: Gray, Rowena; Montresor, Giulia; Wright, Greg C.
• 署名单位: University of California System; University of California Merced; University of Mannheim
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2020.103345
• 发表日期: 2020
• 关键词: Product innovation; Process innovation; immigration; Labor supply shock

摘要

The extent to which firms respond to labor supply shocks has important implications for local and national economies. We exploit firm-level panel data on product and process innovation activities in the United Kingdom and find that the large, unanticipated, low-skill labor supply (immigration) shock generated by the 2004 expansion of the European Union to Eastern European countries increased process innovation and reduced product innovation, with overall innovation activity going up. This implies that the innovation response to labor supply shocks may be more nuanced than the previous literature has suggested. Both of these effects are increasing in the low-skill intensity of firm production. In addition, the reduction in product innovation is lessened for firms whose output is sold locally, which is consistent with a demand side effect generated by the labor supply shock. Published by Elsevier B.V.