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Cambridge Journal of Economics Advance Access published online on November 18, 2008
Cambridge Journal of Economics, doi:10.1093/cje/ben042
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© The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

Human capital, graduate migration and innovation in British regions

Alessandra Faggian and Philip McCann*

* University of Southampton, UK, email: A.Faggian{at}soton.ac.uk (AF) and University of Waikato, New Zealand and University of Reading, UK (PM)

Address for correspondence: Philip McCann, Department of Economics, University of Waikato, Private Bag 3105, Hamilton 3240, New Zealand E-mail: pmccann{at}waikato.ac.nz

With the aid of a geographical information system, our paper constructs a three stage least squares simultaneous equation model to investigate the interrelationships between the interregional flows of human capital, and the innovation dynamism of a region. In order to do this, we model the interregional migration behaviour of high quality British university graduates from university into first employment, and we relate these human capital flows to both the labour market characteristics and the knowledge characteristics of the employment regions. This is done for all industries and separately for just high technology industries. Our results indicate that for England and Wales there is a two-way causality between the interregional human-capital employment-migration flows of recent university graduates and the innovation performance of regions. However, the results for Great Britain as a whole depend on whether London is included and Scotland is excluded. We find little or no support for the argument that the presence of local universities or small firms promotes regional innovation.

Key Words: Graduates • Migration • High technology

JEL classifications: I230, O180, R230

Manuscript received October 30, 2006; final version received April 8, 2008.


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