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Class Year

2011

Abstract

This paper attempts to empirically evaluate the contribution of international graduate students to U.S. innovation. The main framework used is a simplified version of the ―national ideas production function‖. Two econometric specification are estimated – one in which a time trend is incorporated to observe the short-term relationship between the variables and one in which no time trend is included with the goal of capturing the variables‘ long term equilibrium relationship. The results suggest that in the long-term the number of international graduate students significantly (at the 10% level) affects innovative activity. However, when the short-term relationship of the variables is analyzed it is found that the effect of the foreign students is negative and insignificant. This is attributed to the fixed size of graduate programs in the short run and their tendency to expand in the long-run.

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