Essays on skills, management and productivity

Abstract

This thesis investigates the role of skills and universities in explaining differences in economic performance between firms and regions. The first chapter examines the relationship between university entry and GDP growth between 1950 and 2010 based on new data that combines university entry in 1,500 regions across 78 countries. It finds that a 10% increase in a region’s universities is associated with 0.4% higher GDP per capita in that region, with evidence of spillovers to neighbouring regions. Part of the university effect appears to be mediated through increases in human capital and innovation, and we also find evidence that universities shape views on democracy. Focusing on the UK, the second chapter studies how university growth impacts on local industry composition and productivity using panel data on firms and nearby university enrolments over the period 1997-2016. This spatial analysis reveals that university growth stimulates high-tech start-ups and the effects are stronger for higher quality, research intensive universities and areas of higher initial human capital. Employment effects are more muted, though smaller establishments appear to get larger as universities grow. On average, positive productivity impacts are found only in more high-tech intensive areas. The third chapter provides evidence for a complementarity between modern management practices and higher education using data on manufacturing firms, universities and labour markets across 19 countries. It finds that firms further from universities have lower management scores, even when controlling for a rich set of observables and region fixed effects. Analysis using estimates of regional skill premia suggests that variation in the price of skills drives these effects. The fourth chapter examines differences in economic performance across the UK using a variety of data sources and measures. Ten stylised facts are presented which are relevant for policymakers and researchers engaged in the development of industrial strategy in the UK.