The regional impact of research universities?

Does the establishment of a regional university and the associated increase in research grants function as an “engine” for the regional economy in terms of wages, patents, startups etc?

In a new research paper together with Carl Bonander, Niklas Jakobsson and Federico Podestà we evaluate the regional impact of large investments into (public) regional universities. The top panel in the figure above shows the impact on students, doctoral degrees and professors from the establishment of three new universities in Sweden in 1999. The dashed vertical line indicates the year of 1999 and the figures shows the development in the “treated” regions (regions where the new university was established) compared to the “control” regions in the dashed lines (similar regions where no university was established).

We see that the number of awarded doctoral degrees and number of professors increase substantially in the regions with an established university (top panel: the 2nd and 3rd graph).

However, when we look at the development in relevant innovation and economic outcomes, such as patents, number of startup firms, regional wages etc. we find no effect what so ever! This is shown in the lower panel (for patents and startup firms) where the two lines over time are more or less identical.

In sum, the frequent discussion that regional universities and the associated block research grants can act as an “engine” in terms of regional patents, startup firms and wages is not supported by the data. This is true for all universities established in Sweden in 1999 (Örebro, Karlstad, Växjö/Linné), where we do not find a positive effect for any of our innovation or economic outcome measures.

Link to the published paper

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