Intellectual Property Rights, Migration, and Diaspora

In this paper we study theoretically and empirically the role of the interaction
between skilled migration and intellectual property rights (IPRs) protection in determining innovation in developing countries (South). We show that although emigration
from the South may directly result in the well-known concept of brain drain, it also
causes a brain gain effect, the extent of which depends on the level of IPRs protection
in the sending country. We argue this to come from a diaspora channel through which
the knowledge acquired by emigrants abroad can flow back to the South and enhance
the skills of the remaining workers there. By increasing the size of the innovation sector
and the skill-intensity of emigration, IPRs protection makes it more likely for diaspora
gains to dominate, thus facilitating a potential net brain gain. Our main theoretical
insights are then tested empirically using a panel dataset of emerging and developing
countries. The findings reveal a positive correlation between emigration and innovation
in the presence of strong IPRs protection.