Abstract
Universities are important economic actors and make a considerable impact on the demand and supply side of their local economies. The aim of this paper is to quantify, compare and classify the different economic demand-and supply-side contributions of the university locations within Lower Saxony (Germany) using a combination of multiplier analysis and spatial econometrics on a NUTS 3 level. In comparison to numerous other studies, this paper does not focus on the economic impact of individual cases or a selected university location but gives a complete picture of the importance and significance of all university locations within Lower Saxony. The income-induced direct and indirect demand effects are estimated using a rich data set of higher education statistics in combination with an income and employment multiplier derived from a regional input-output table. The supply-side effects, i.e. the impact of the education and research outcomes, are estimated with the help of spatial panel regressions, a model derived from human capital theory and knowledge spillover theory. The estimation results give a complete and reproducible impression of the importance and significance of the different university locations, offering the opportunity for comparisons and classifications.
Highlights
Universities are important economic actors that affect the local economy in two ways
This paper aims to determine the importance of each university location within Lower Saxony in relation to its own local economy as well as in comparison with the other university locations, and tries to detect spatial disparities or patterns
The estimation results give an impression of the economic importance and the size of the demand- and supply-side effects of university locations in Lower Saxony and help to identify regional patterns or spatial disparities
Summary
Universities are important economic actors that affect the local economy in two ways. Favoured procedures used by studies considering the supply-side effects are the qualitative analysis and quantitative evaluation of interviews and questionnaires (Blume/Fromm 2000; Hamm/Wenke 2002; Assenmacher/Leßmann/Wehrt 2004; Gerlach/ Sauer/Stoetzer 2005; Knappe 2006; Pavel 2008; Mattes 2012; Hamm/Kopper 2016) These papers deduce the positive regional impact of the supply-side effects from the endogenous growth theory of Romer (1986) and Lucas (1988): educating students and doing research can be interpreted as an investment in human capital resulting in the accumulation of knowledge, an increase in productivity and the generation of innovation. Medium to long-term supply-side effects encompass the time period 2010-2016
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