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The Expenditure Impacts of London-based Individual Higher Education Institutions (HEIs) and their Students on the Economy of England: Homogeneity or Heterogeneity?

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  • Kristinn Hermannsson

    ()
    (Fraser of Allander Institute, Strathclyde University)

  • Katerina Lisenkova

    ()
    (Fraser of Allander Institute, Strathclyde University)

  • Peter McGregor

    ()
    (Fraser of Allander Institute, Strathclyde University)

  • Kim Swales

    ()
    (Department of Economics, University of Strathclyde)

Abstract

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) to identify the impact of London-based HEIs on the English economy in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of London HEIs. When we treat each of the 38 London-based Higher Education Institutions (HEIs) that existed in England in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous (though less so than HEIs in Wales and Scotland), with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon general public funding and their ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of London HEIs upon the English economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.

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Bibliographic Info

Paper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 1030.

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Length: 49 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:str:wpaper:1030

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Keywords: London Higher Education Institutions; Input-Output; England; Impact study; Multipliers; budget constraint.;

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  1. Scott Loveridge, 2004. "A Typology and Assessment of Multi-sector Regional Economic Impact Models," Regional Studies, Taylor & Francis Journals, vol. 38(3), pages 305-317.
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