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University Innovation, Local Economic Growth, and Entrepreneurship

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  • Naomi Hausman

Abstract

Universities, often situated at the center of innovative clusters, are believed to be important drivers of local economic growth. This paper identifies the extent to which U.S. universities stimulate nearby economic activity using the interaction of a national shock to the spread of innovation from universities - the Bayh-Dole Act of 1980 - with pre-determined variation both within a university in academic strengths and across universities in federal research funding. Using longitudinal establishment-level data from the Census, I find that longrun employment and payroll per worker around universities rise particularly rapidly after Bayh-Dole in industries more closely related to local university innovative strengths. The impact of university innovation increases with geographic proximity to the university. Counties surrounding universities that received more pre-Bayh-Dole federal funding - particularly from the Department of Defense and the National Institutes of Health - experienced faster employment growth after the law. Entering establishments - in particular multi-unit firm expansions - over the period from 1977 to 1997 were especially important in generating long-run employment growth, while incumbents experienced modest declines, consistent with creative destruction. Suggestive of their complementarities with universities, large establishments contributed more substantially to the total 20-year growth effect than did small establishments.

Suggested Citation

  • Naomi Hausman, 2012. "University Innovation, Local Economic Growth, and Entrepreneurship," Working Papers 12-10, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:12-10
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    File URL: https://www2.census.gov/ces/wp/2012/CES-WP-12-10.pdf
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    References listed on IDEAS

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    Cited by:

    1. Mowery, David C. & Ziedonis, Arvids A., 2015. "Markets versus spillovers in outflows of university research," Research Policy, Elsevier, vol. 44(1), pages 50-66.
    2. Nathan Goldschlag & Stefano Bianchini & Julia Lane & Joseba SanMartin Sola & Bruce Weinberg, 2016. "Research Funding and Regional Economies," Working Papers 16-32, Center for Economic Studies, U.S. Census Bureau.
    3. Aaron Chatterji & Edward Glaeser & William Kerr, 2014. "Clusters of Entrepreneurship and Innovation," Innovation Policy and the Economy, University of Chicago Press, vol. 14(1), pages 129-166.
    4. Tom Kemeny & Maryann Feldman & Frank Ethridge & Ted Zoller, 2016. "The economic value of local social networks," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 1101-1122.
    5. Shimeng Liu, 2015. "Spillovers from Universities: Evidence from the Land-Grant Program," Working Paper 9410, USC Lusk Center for Real Estate.
    6. Carlino, Gerald & Kerr, William R., 2015. "Agglomeration and Innovation," Handbook of Regional and Urban Economics, Elsevier.
    7. Isabel Tecu, 2013. "The Location of Industrial Innovation: Does Manufacturing Matter?," Working Papers 13-09, Center for Economic Studies, U.S. Census Bureau.
    8. Subhra Saha & Joseph Staudt & Bruce Weinbergx, 2017. "Estimating the Local Productivity Spillovers from Science," Working Papers 17-56, Center for Economic Studies, U.S. Census Bureau.
    9. Nathan, Max & Vandore, Emma, 2013. "Here be startups: exploring a young digital cluster in inner East London," LSE Research Online Documents on Economics 58424, London School of Economics and Political Science, LSE Library.
    10. Peter Howitt, 2013. "From Curiosity to Wealth Creation: How University Research can Boost Economic Growth," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 383, June.
    11. Liu, Shimeng, 2015. "Spillovers from universities: Evidence from the land-grant program," Journal of Urban Economics, Elsevier, vol. 87(C), pages 25-41.
    12. Corine Autant-Bernard, 2015. "Que savons-nous de l’impact économique des parcs scientifiques ? Une revue de la littérature," Working Papers 1526, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    13. Corinne Autant-Bernard, 2015. "Que savons-nous de l’impact économique des parcs scientifiques ? Une revue de la littérature," Working Papers halshs-01211662, HAL.

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    Keywords

    CES; economic; research; micro; data; microdata; clusters; innovation; local economic growth; universities;

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