Article | Review of Economics and Statistics | August 2008

Ethnic Scientific Communities and International Technology Diffusion

by William R. Kerr

Abstract

This study explores the importance of knowledge transfer for international technology diffusion by examining ethnic scientific and entrepreneurial communities in the US and their ties to their home countries. US ethnic research communities are quantified by applying an ethnic-name database to individual patent records. International patent citations confirm knowledge diffuses through ethnic networks, and manufacturing output in foreign countries increases with an elasticity of 0.1-0.3 to stronger scientific integration with the US frontier. To address reverse-causality concerns, reduced-form specifications exploit exogenous changes in US immigration quotas. Consistent with a model of sector reallocation, output growth in less developed economies is facilitated by employment gains, while more advanced economies experience sharper increases in labor productivity. The ethnic transfer mechanism is especially strong in high-tech industries and among Chinese economies. The findings suggest channels for transferring codified and tacit knowledge partly shape the effective technology frontiers of developing and emerging economies.

Keywords: Technology; Ethnicity Characteristics; Production; Integration; Knowledge Sharing; Patents; Employment; Performance Productivity; Entrepreneurship; Change; Developing Countries and Economies; Immigration; China; United States;

Citation:

Kerr, William R. "Ethnic Scientific Communities and International Technology Diffusion." Review of Economics and Statistics 90, no. 3 (August 2008): 518–537. (Appendix.)