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Britta Glennon: I think a lot of the
rhetoric is often around, you
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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,
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right? So, in terms of
investment, in terms of
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innovation, in terms of
entrepreneurship, there's so
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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.
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- 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
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your host, Dan Loney, and in
each episode, we'll be diving
00:00:34
deep into the inspiration behind
the groundbreaking research that
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Wharton professors have
conducted, and exploring how
00:00:41
their findings resonate with the
world today.
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Dan Loney: The topic of immigration is
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one that is on
the minds of many people here in
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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
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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
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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
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recently about how immigration
and firms kind of connect. Take
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us through a little bit of what
you've done.
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Yeah, absolutely.
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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.
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So for example, if we're
thinking about visas— so I focus
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on skilled immigration. Skilled
immigration visas are almost
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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
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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
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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
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which the firm really matters,
right? So—
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immigrants, they are 80% more
likely than natives to start
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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
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like that. They're actually
creating jobs through creating
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new startups. They also actually
attract a lot of investment.
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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
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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
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creates jobs, right?
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And you know, they also— when
immigrants join firms, you can
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see, sort of within firms,
there's this complementary
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relationship with Americans,
where, when they come together,
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they're actually more
innovative, right? And so you
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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
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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
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firms and immigrants are
interacting that are really
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positive for the economy.
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I found it
interesting that one of
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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
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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.
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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
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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
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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
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company in the US hires
immigrants from a particular
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country— so say a particular
company hires a number of Indian
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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
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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
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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
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this really strong positive
relationship between hiring
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immigrants and the firm's
performance in that home
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country, for those reasons.
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There is also the component of
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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
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afterwards as well. Correct?
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Yeah, absolutely. So—
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if you think about H-1B visas—
that's probably the best-known
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skilled immigration visa. They
often— firms are
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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
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know, a different experience
that Americans have. And
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different kind of ideas,
different knowledge, different
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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
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that's actually one of the
reasons why
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they are— there tends to be a
boost in innovation, for
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example. Because innovation is
often about the recombination of
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different ideas. And so, yeah,
they're absolutely— they're
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bringing that from their home
countries, and that's then
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boosting firm performance and
innovation.
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You also mentioned in
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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
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around research that would occur
with either units in both
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countries as well.
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Yeah. So that
too, right? So it's not
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just kind of within that firm in
the US where this could be
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happening, but also, if you hire
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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
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end up with these cross-
border teams producing new
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research. And so it actually
really boosts global
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science, right, and
collaborations across different
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parts of the world as well.
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So right now,
one of the concerns
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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
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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,
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with the Chinese involved, anti-
Chinese sentiment factors when
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you look at how Chinese
scientists work here in the US.
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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
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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
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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
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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
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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,
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top talents from from China.
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So when you think
about the
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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
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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.
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Yeah, exactly, exactly.
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And they're—
they're going to other countries
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instead, right? So it's not— you
know, if you care about
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something like national
competitiveness, then actually,
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that's even more worrying.
Because other countries are
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getting that talent
instead of us.
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I would assume that because
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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
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components of potential future
development, or at least cuts it
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off before it even has a chance
to get started.
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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
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study in 2019. Right? Which
arguably is before the tensions
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really escalated. And we're
already finding, you know, big
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effects in terms of fewer
students, fewer Chinese students
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coming to the US, fewer Chinese
students staying in the US.
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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—
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is really horrible. Not just a
productivity hit, but some
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dropping out of the
workplace altogether. And the US-
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China scientific relationship
arguably has been the most
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important one in the world for a
couple decades now. There's
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huge amount of collaboration
between scientists in both
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countries. There's huge amounts
of Chinese students coming to
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the US and learning and that
that kind of knowledge transfer
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is really important for
innovation, right? That
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recombination of ideas from
different parts of the world.
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And you know, as those tensions
increase, that circulation of
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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.
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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
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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?
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Yeah. I mean, that's part of
what sparked our interest in
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studying this, is that
there's been,
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you know, some really
phenomenal work documenting what
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happened to science during World
War One, for example. You know,
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when there were real complete
cuts, cutting off of
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collaboration between parts of
the world.
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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
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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
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they're still quite significant.
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But that component of quote-
unquote "war"
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is probably a little
bit different today because of
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technology and how much you can
factor in the component of
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hacking and attacks via the
internet as a way to be able to
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do harm to your— to your
opposition.
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Yeah, absolutely. Yeah.
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You talk about that
component of STEM.
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How long have we really been
seeing that?
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And I guess 2016
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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
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impact of these tensions
starting to take off around 2016.
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And we attribute it to a couple
things.
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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,
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Xiaoxing Xi, who's a physicist
at Temple here, who was
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arrested— turned out he was not
guilty— on
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the belief that he was a spy for
the Chinese government.
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- Right.
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- So that took place, and then you
had the Trump campaign, and—
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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
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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
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China initiative, which was, you
know, the formalized version of
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arresting scientists, Chinese
scientists, for fear of espionage.
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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
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immigrational relationships
between countries, especially in
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a— in a technological area,
where, to a degree in many
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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
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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—
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the restrictions have gotten
much more—
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much more tough since then.
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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
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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
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focus on US-China in this one
paper. But you know, general
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negative sentiment towards
immigrants overall are likely to
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have some of the similar
effects, although we haven't
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directly studied that.
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Right. But the
expectation— I was gonna
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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
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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
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these elements playing out right
now.
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Yeah. I mean, I have seen—
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not my work, but another paper
that documented that actually
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there has been a decline in
international students at US
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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
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other options, right? And
so we— that we are already
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starting to see that in our
universities.
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Off of the research you did
for this study,
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is there a next step that you
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think is the logical step
for the next piece of research
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to go off of this?
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Yeah, I mean, there's—
well, there's lots of
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different things. As always,
research always spawns a million
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more questions than you can
possibly answer.
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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
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really like to look into is, you
know, there is—
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things like the China initiative
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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
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increase in sort of espionage
threats from the Chinese
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government. And so national
security is not something that
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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
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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
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welfare perspective, how much of
this is "Well, maybe it's okay,
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given the
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benefit of national security," and
where, like— actually, this is
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doing more harm than good.
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Britta, great to have you
here today. Thank you very much.
00:15:03
- Thank you.
- Britta Glennon,
00:15:04
who's Assistant Professor of
Management here at the Wharton School.
00:15:08
- Thank you for listening
to <i>The Ripple Effect</i>. We hope
00:15:10
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