Talent flows and the geography of knowledge production: causal evidence from multinational firms

Leveraging a unique dataset merging patent data with all work-related migration reforms that took place in 15 countries over 26 years, we show that reforms discouraging inventor mobility decrease the patenting of MNE subsidiaries within a country, while reforms encouraging it have a positive but much smaller effect. Additionally, reforms adopted in the U.S. affect innovation in other countries in the opposite direction, highlighting the existence of a global competition for talent. Finally, we find that policies easing migration have facilitated about half of the shift in global innovation toward emerging markets.