ServiceFriday: Universities as Drivers of Prosperity

For strategic executives trying to figure out the location for the next expansion of their business, the decision might have just become a little bit easier. In a research paper published in the Economics of Education Review in September 2018, Anna Valero and John Van Reenen examined the economic effect of universities on their surrounding area. In their paper, they showed that the existence of a university in a certain region could be linked to an improvement of the economic situation with a 0.4% rise of GDP per 10% rise of number of universities per capita. What’s more, they were able to map the effect to the location of the university and show that it weakened with increasing distance from the teaching institution. As a center for promoting learning and development, universities function as an important motor of innovation and – even more important – amplify the attraction and retention of well-educated human capital to a certain region, which could make the presence of a university in a certain region a point of consideration for strategic decisions in companies.

To access the article (open source) visit this link:  https://doi.org/10.1016/j.econedurev.2018.09.001.  

HT: Marginal Revolution