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“Policy Scepticism” and the Impact of Northern Irish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints

  • Hermannsson, Kristinn
  • Lisenkova, Katerina
  • McGregor, Peter G.
  • Swales, J. Kim

This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010b) for the case of Northern Ireland. The motivation is to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of Northern Irish HEIs. A comparative analysis will follow in due course. A “policy scepticism” has emerged that challenges the results of conventional regional HEI impact analyses. This denial of the importance of the expenditure impacts of HEIs appears to be based on a belief in either a binding regional resource constraint or a regional public sector budget constraint. In this paper we provide a systematic critique of this policy scepticism. However, while rejecting the extreme form of policy scepticism, we argue that it is crucial to recognise the importance of the public sector expenditure constraints that are binding under devolution. We show how conventional impact analyses can be augmented to accommodate regional public sector budget constraints. While our results suggest that conventional impact studies overestimate the expenditure impacts of HEIs, they also demonstrate that the policy scepticism that treats these expenditure effects as irrelevant neglects some key aspects of HEIs, in particular their export intensity.

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Paper provided by Scottish Institute for Research in Economics (SIRE) in its series SIRE Discussion Papers with number 2010-78.

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Date of creation: 2010
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Handle: RePEc:edn:sirdps:207
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  1. Patrizio Lecca & Peter McGregor & Kim Swales, 2010. "Balanced Budget Government Spending in a Small Open Regional Economy," Working Papers 1020, University of Strathclyde Business School, Department of Economics.
  2. Harvey W. Armstrong, 1993. "The Local Income and Employment Impact of Lancaster University," Urban Studies, Urban Studies Journal Limited, vol. 30(10), pages 1653-1668, December.
  3. Richard I. D. Harris, 1997. "The Impact of the University of Portsmouth on the Local Economy," Urban Studies, Urban Studies Journal Limited, vol. 34(4), pages 605-626, April.
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  5. Brownrigg, M, 1973. "The Economic Impact of a New University," Scottish Journal of Political Economy, Scottish Economic Society, vol. 20(2), pages 123-39, June.
  6. Peter Mcgregor & Kim Swales, 2005. "Economics of devolution/decentralization in the UK: Some questions and answers," Regional Studies, Taylor & Francis Journals, vol. 39(4), pages 477-494.
  7. JH Ll DEWHURST, . "Regional Size, Industrial Location And Input-Output Expenditure Coefficients," Dundee Discussion Papers in Economics 074, Economic Studies, University of Dundee.
  8. Richard Harris & Aying Liu, 1998. "Input-Output Modelling of the Urban and Regional Economy: The Importance of External Trade," Regional Studies, Taylor & Francis Journals, vol. 32(9), pages 851-862.
  9. Christopher Blake & Stuart McDowall, 1967. "A Local Input-Output Table," Scottish Journal of Political Economy, Scottish Economic Society, vol. 14(3), pages 227-242, November.
  10. Round, J. I., 1978. "On estimating trade flows in interregional input output models," Regional Science and Urban Economics, Elsevier, vol. 8(3), pages 289-302, September.
  11. Harminder Battu & John Finch, 1998. "Integrating knowledge effects into university impact studies. A case study of Aberdeen University," Working Papers 98-08, Department of Economics, University of Aberdeen.
  12. Linda Ferguson & David Learmonth & Peter G McGregor & J Kim Swales & Karen Turner, 2007. "The impact of the Barnett formula on the Scottish economy: endogenous population and variable formula proportions," Environment and Planning A, Pion Ltd, London, vol. 39(12), pages 3008-3027, December.
  13. 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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