Inventi Impact: Emerging Economies
publication date: 2011/7/15

INSTITUTIONS OF HIGHER EDUCATION AND THE REGIONAL ECONOMY: A LONG-TERM SPATIAL ANALYSIS
                  Hui-chen Wang

ABSTRACT
This paper investigates the long-term e?ects of institutions of higher education (IHEs) on regional economic growth with an application of spatial econometrics. IHEs are classi?ed based on the ?elds of programs o?ered and degree-granting activities. I use county-level data for the contiguous US to estimate the marginal e?ects of IHEs on the changes in log employment and log wages in own counties and neighboring counties between 1970 and 2000. Evidence is found of knowledge spillovers of IHEs, especially for cross-county spillovers. Counties with more IHEs on location or in their neighboring counties experienced modestly faster employment growth over the 30-year period. Institutions o?ering accredited business programs had much larger e?ects than the others. With respect to degree-granting activities, only those institutions awarding bachelor’s degrees or above had signi?cant growth-boosting e?ects. When industrial mix of counties is controlled for, own-county e?ects diminish except for business programs, whereas all neighboring-county e?ects prevail.

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