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Britta Glennon: I think a lot of the
rhetoric is often around, you know, taking jobs or something
like that. And what's often
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missed is how much they actually
contribute to the economy, right? So, in terms of
investment, in terms of
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innovation, in terms of
entrepreneurship, there's so many dimensions on which they're
playing a really positive role
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in the economy that just doesn't
get talked about in the news. - Welcome to <i>The Ripple
Effect</i>, the podcast that takes
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you on a journey through the
minds of Wharton faculty. I'm your host, Dan Loney, and in
each episode, we'll be diving
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deep into the inspiration behind
the groundbreaking research that Wharton professors have
conducted, and exploring how
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their findings resonate with the
world today. Dan Loney: The topic of immigration is
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one that is on
the minds of many people here in the United States right now, but
it is also a very important
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economic topic as well. Pleased
to be joined here in studio by Britta Glennon of the Wharton
School, who has researched this
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topic in the past. She joins us
here in studio. Britta is an Assistant Professor of
Management here at the school.
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- It's so nice to be here.
- So you have done research rather recently about how immigration
and firms kind of connect. Take
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us through a little bit of what
you've done. Yeah, absolutely. So I think— first of all, you
know, I really wanted to
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emphasize the importance of the
role of the firm in immigration. So for example, if we're
thinking about visas— so I focus
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on skilled immigration. Skilled
immigration visas are almost entirely sponsored by firms. So
firms are actually the ones who
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select the individuals who get
the visas. They do that entire process, right? They're the ones
who apply, and they're the ones
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who actually that immigrant is
then tied to for the length of their visa, right? So just from
that perspective, they're
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playing a really important role.
But there's also other ways in which the firm really matters,
right? So—
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immigrants, they are 80% more
likely than natives to start firms, for example, right? And
so it's not just the case that
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they are, you know, coming in
and taking jobs or something like that. They're actually
creating jobs through creating
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new startups. They also actually
attract a lot of investment. FDI, right? So when you have an
influx of immigrants, what often
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follows is companies from their
home country, from their country of origin, will actually follow.
And so they'll start setting up
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their own subsidiaries there.
And that, of course, also creates jobs, right? And you know, they also— when
immigrants join firms, you can
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see, sort of within firms,
there's this complementary relationship with Americans,
where, when they come together,
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they're actually more
innovative, right? And so you get more patents as well, more
innovation when immigrants and
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natives are coming together. And
that makes the firms that hire them actually perform a lot
better, become more innovative,
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et cetera, right? So there's all
these different ways in which firms and immigrants are
interacting that are really
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positive for the economy. I found it
interesting that one of the areas you touch on is not
only the impact that you will
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see, just say, here in the
United States, with immigrants coming over here on a visa, but
there's a corollary impact that
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occurs in that person's home
country as well. Yeah. Absolutely, yeah. So this kind
of goes back to— so some of this
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goes back to the investment
piece, right? So if, for example, there is a community of
Swedish immigrants, right? Then
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there's going to be an increase
in Swedish companies investing in that area. So that's been
well documented in the research.
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But also, you know, it goes the
other way as well, that if a company in the US hires
immigrants from a particular
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country— so say a particular
company hires a number of Indian immigrants— they're actually
going to perform better in
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India, and they're going to be
more likely to expand and invest in India. So that's actually one
of the ways that they really
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help firms. Because they know a
lot about, for example, how India government contracts work,
perhaps. Or they know about
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Indian consumer tastes or things
like that, right? And so there's this really strong positive
relationship between hiring
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immigrants and the firm's
performance in that home country, for those reasons.
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There is also the component of when you have students come over
to the United States to get
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their education, and then what
they do with their careers afterwards as well. Correct?
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Yeah, absolutely. So— if you think about H-1B visas—
that's probably the best-known
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skilled immigration visa. They
often— firms are often hiring students, right, with
those H-1B visas, to come and
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work with them afterwards. And
what they're coming with is, you know, a different experience
that Americans have. And
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different kind of ideas,
different knowledge, different connections. And that's sort of
bringing this new perspective
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into the firm and bringing new
knowledge into the firm. And so that's actually one of the
reasons why
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they are— there tends to be a
boost in innovation, for example. Because innovation is
often about the recombination of
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different ideas. And so, yeah,
they're absolutely— they're bringing that from their home
countries, and that's then
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boosting firm performance and
innovation. You also mentioned in the paper, even— there's the
business component, but there's
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also the component that can
sometimes be impacted in and around research that would occur
with either units in both
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countries as well. Yeah. So that
too, right? So it's not just kind of within that firm in
the US where this could be
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happening, but also, if you hire immigrants from a particular
country, they may still be in
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contact with people in their
home country, and so you might end up with these cross-
border teams producing new
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research. And so it actually
really boosts global science, right, and
collaborations across different
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parts of the world as well. So right now,
one of the concerns that is out there is the kind of—
the "anti" sentiment, you know.
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And this will happen by
different people against different immigrants who will be
coming here to the US. In terms
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of the research that you did,
there's a component, I guess, with the Chinese involved, anti-
Chinese sentiment factors when
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you look at how Chinese
scientists work here in the US. Yeah, yeah. So— so we found that
basically growing hostility
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towards China—some of that is,
you know, policy-driven. Some of that is sort of a more organic,
sort of negative sentiment in
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the US. That's really deterred
Chinese students from coming to the US. So we see that 1000s of
STEM PhD students from China
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have ended up not coming to the
US, and are instead typically going to other Anglophone
countries, actually. So it's not
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that they're going back to
China, it's actually that they're going to Canada or the
UK or Australia or New Zealand.
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And so, you know, we're missing
out on a lot of these, you know, top talents from from China.
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So when you think
about the importance of STEM education and
and how that is going to, you
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know, advance a lot of
components in our economy right now, that's a significant loss
that our country would be seeing
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by not having those individuals
here in the United States. Yeah, exactly, exactly.
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And they're—
they're going to other countries instead, right? So it's not— you
know, if you care about
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something like national
competitiveness, then actually, that's even more worrying.
Because other countries are
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getting that talent
instead of us. I would assume that because the relations between the US and
China are not great right now,
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that that relation, relationship,
has an impact on a lot of these components of potential future
development, or at least cuts it
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off before it even has a chance
to get started. Yeah, absolutely. So, you know, we're
really capturing only the tip of
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the iceberg in our paper,
because we actually stopped our study in 2019. Right? Which
arguably is before the tensions
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really escalated. And we're
already finding, you know, big effects in terms of fewer
students, fewer Chinese students
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coming to the US, fewer Chinese
students staying in the US. We're seeing kind of a real
productivity hit to ethnically
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Chinese researchers in the US as
well, which obviously is— is really horrible. Not just a
productivity hit, but some
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dropping out of the
workplace altogether. And the US- China scientific relationship
arguably has been the most
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important one in the world for a
couple decades now. There's huge amount of collaboration
between scientists in both
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countries. There's huge amounts
of Chinese students coming to the US and learning and that
that kind of knowledge transfer
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is really important for
innovation, right? That recombination of ideas from
different parts of the world.
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And you know, as those tensions
increase, that circulation of ideas and people is going to
continue to decline, and we're
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going to lose out on what that—
that collaboration was creating. Is that tension then
fairly similar to what you would
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see— I mean, obviously we're not
at war with China. But obviously there's a significant tension.
But is it somewhat similar to
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what you might see if countries
were going to war at some point? Yeah. I mean, that's part of
what sparked our interest in
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studying this, is that
there's been, you know, some really
phenomenal work documenting what
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happened to science during World
War One, for example. You know, when there were real complete
cuts, cutting off of
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collaboration between parts of
the world. And, you know, really big
detrimental effects. And we were
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curious if you would still see
that if it was just kind of these broader tensions. And
you know, they're a little bit less
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dramatic, right, because it's
not a complete cutoff. But they're still quite significant.
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But that component of quote-
unquote "war" is probably a little
bit different today because of
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technology and how much you can
factor in the component of hacking and attacks via the
internet as a way to be able to
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do harm to your— to your
opposition. Yeah, absolutely. Yeah. You talk about that
component of STEM.
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How long have we really been
seeing that? And I guess 2016 was a year that we were seeing
part of this shift as well, correct?
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Yeah, that's right. So
we really see in the data the impact of these tensions
starting to take off around 2016.
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And we attribute it to a couple
things. This is around when at least
some of the arrests of Chinese
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scientists started to take off.
There was one very famous one, Xiaoxing Xi, who's a physicist
at Temple here, who was
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arrested— turned out he was not
guilty— on the belief that he was a spy for
the Chinese government.
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- Right. - So that took place, and then you
had the Trump campaign, and— which very much painted China as
the enemy. And so that's sort of
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when we start to see this
negative sentiment against China growing. And then it, of course,
gets even more solidified when
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you have the US-China trade war,
and when you have the formal China initiative, which was, you
know, the formalized version of
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arresting scientists, Chinese
scientists, for fear of espionage. How much of a
challenge is it then, right now,
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with trying to build out a lot
of these components of immigrational relationships
between countries, especially in
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a— in a technological area,
where, to a degree in many cases, we're still learning what
the impacts truly are in many cases?
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Yeah. I mean, I think we
certainly can say that what we've found so far is probably a
lower bound, right, because I think
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it's gotten much tougher since
then, right? It's gotten much— the restrictions have gotten
much more—
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much more tough since then. It's a little bit difficult
empirically to tease that out,
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just because you have Covid and
you have some other things going on. But at least from
preliminary looks at the data,
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right, these effects are only
getting bigger. And you know, we focus on US-China in this one
paper. But you know, general
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negative sentiment towards
immigrants overall are likely to have some of the similar
effects, although we haven't
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directly studied that. Right. But the
expectation— I was gonna ask you this anyway, whether
or not you can start to even
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correlate it towards what we're
seeing against immigrants from other countries here in the
United States. And I think it's
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probably a safe assumption to
say there probably are some of these elements playing out right
now.
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Yeah. I mean, I have seen— not my work, but another paper
that documented that actually
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there has been a decline in
international students at US universities. And actually, the
types of students who are less
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likely to come are the highest
quality ones, because they have other options, right? And
so we— that we are already
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starting to see that in our
universities. Off of the research you did
for this study,
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is there a next step that you think is the logical step
for the next piece of research
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to go off of this? Yeah, I mean, there's—
well, there's lots of different things. As always,
research always spawns a million
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more questions than you can
possibly answer. Spider webs out for you,
right? - Yeah.
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- Yeah. - But I— you know, one of the
things that I think we would really like to look into is, you
know, there is—
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things like the China initiative and this fear of espionage, they
didn't come out of nowhere,
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right? There have been, you
know— there has been a credible increase in sort of espionage
threats from the Chinese
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government. And so national
security is not something that you want to completely brush
aside, but our feeling is that
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it's spread much beyond national
security. And so we'd really like to be able to tease out,
you know, where it's kind of
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gone beyond that, right? So
teasing, just from a broader welfare perspective, how much of
this is "Well, maybe it's okay,
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given the benefit of national security," and
where, like— actually, this is
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doing more harm than good. Britta, great to have you
here today. Thank you very much.
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- Thank you.
- Britta Glennon, who's Assistant Professor of
Management here at the Wharton School.
00:15:08
- Thank you for listening
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