Essays on immigration, innovation, and trade

Abstract

This thesis comprises three essays on immigration, innovation, and trade. The first essay utilizes an enhanced gravity model to estimate the effect of lagged immigration waves on Canadian imports and exports, by province. Empirically, this model was tested using Canadian data on import and export flows to the top 40 countries of origin for immigrants to Canada based upon the composition of the most recent wave of immigrants. The results are consistent with previous studies, where immigrants increased both import and export trade flows. By adding the provincial immigrant wave variable, it was also found that new immigrants affect imports almost immediately, whereas for exports, the immigrant effect is not significant for at least 5 years and may take as long as 20 years to reach full impact.The second essay utilizes an enhanced gravity model to estimate the effect of innovative capability on Canadian provincial exports to Canada’s top 60 importing countries. Empirically, this model was tested using Canadian data on export flows to Canada’s top 60 importing countries. The results are supportive of a province’s innovative capability leading to increased exports, where innovative capacity is measured by international patents, scientific journal articles, and R&D expenditures. For example, in terms of innovative capacity as measured by international (U.S.) patents, provinces with higher levels of international patents had higher levels of total exports, where this effect was greater for exports to developing versus developed countries. Furthermore, provincial R&D expenditures as well as the number of provincial scientific publications (in addition to provincial international patents) were found to be significant drivers in increasing the amount of provincial hi-tech exports to developed countries.The third essay utilizes an augmented national ideas production function to examine skilled immigrants’ impact on Canadian innovation at the provincial level. Empirically, this model was tested using Canadian data by province on innovation flow over an 11 year time period, where innovation flow is defined in terms of international (U.S.) patents. It was found that skilled immigrants, who are proficient in either English or French, have a significant and positive impact on innovation flow in their home province. Further, in examining skilled immigrants by source region, it was found that skilled immigrants from developed countries have the greatest impact on their home province’s innovation flow. This is true of North American/European skilled immigrants for all skill-level categories including language proficiency, education, and immigrant class. For immigrants from developing countries, only highly educated Eastern Europeans and Low Income Asians classified as “Independent Workers” are both significant and positively related to their home province’s innovation flow.