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The Differential Economic Effects of Private Universities in Urban and Rural Regions

Author

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  • Krieger, Bastian

    (ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung; TUM – Technische Universität München)

  • Kroll, Henning

    (Fraunhofer ISI; Leibniz Universität Hannover)

  • Schubert, Torben

    (Fraunhofer ISI; CIRCLE, Lund University)

  • Strecke, Linus

    (ZEW – Leibniz-Zentrum für Europäische Wirtschaftsforschung; TU Berlin)

  • Garcia Chavez, Cecilia

    (Fraunhofer ISI; CIRCLE, Lund University)

Abstract

We investigate whether the local economic effects of niche university actors depend on regional context. Focusing on private university campuses in Germany, we exploit their staggered foundation between 1990 and 2020 and estimate their effects using a conditional staggered difference-in-differences design at the postal-code level. Campus foundations raise local economic activity, but only gradually, with effects becoming statistically significant after about ten years. The effects are strongest in rural and intermediate regions, while urban regions show no significant effects. This pattern supports our argument that niche universities have greater potential to become significant actors in institutionally thinner rural regions.

Suggested Citation

  • Krieger, Bastian & Kroll, Henning & Schubert, Torben & Strecke, Linus & Garcia Chavez, Cecilia, 2026. "The Differential Economic Effects of Private Universities in Urban and Rural Regions," Papers in Innovation Studies 2026/5, Lund University, CIRCLE - Centre for Innovation Research.
    • Handle: RePEc:hhs:lucirc:2026_005
    Note: This research was funded by the German Federal Ministry of Research, Technology, and Space (BMFTR), grant numbers 16NISTA04A and 16NISTA04B.
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    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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