Do Foreign IT Workers Substitute for or Complement the Natives?

This study investigates the interaction between foreign and native information technology (IT) workers within the production function framework. Two competing hypotheses are proposed for the substitution effect and the complementarity effect between foreign and native IT workers. We further test the two hypotheses with an industry-level dataset obtained by matching the productivity data to the CPS surveys. Our preliminary findings support that foreign and native IT workers are complements rather than substitutes. The results of this study can potentially bear important theoretical and practical implications.

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