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Spillovers from Universities: Evidence from the Land-Grant Program

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  • Shimeng Liu

Abstract

This paper estimates the short- and long-run effects of universities on geographic clustering of economic activity, labor market composition and local productivity and presents evidence of local spillovers from universities. I treat the designation of land-grant universities in the 1860s as a natural experiment after controlling for the confounding factors with a combination of synthetic control methods and event-study analyses. Three key results are obtained. First, the designation increased local population density by 6 percent within 10 years and 45 percent in 80 years. Second, the designation did not change the relative size of local manufacturing sector. Third, the designation enhanced local manufacturing output per worker by $2136 (1840 dollars; 57 percent) in 80 years while the short-run effects were negligible. This positive effect on the productivity in non-education sectors suggests the existence of local spillovers from universities. Over an 80-year horizon, my results indicate that the increase in manufacturing productivity reflects both the impact of direct spillovers from universities and general agglomeration economies that arise from the increase in population.

Suggested Citation

  • Shimeng Liu, 2015. "Spillovers from Universities: Evidence from the Land-Grant Program," Working Paper 9410, USC Lusk Center for Real Estate.
  • Handle: RePEc:luk:wpaper:9410
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    3. Ferman, Bruno & Pinto, Cristine Campos de Xavier & Possebom, Vitor Augusto, 2016. "Cherry picking with synthetic controls," Textos para discussão 420, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
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    5. Ferman, Bruno & Pinto, Cristine, 2016. "Revisiting the Synthetic Control Estimator," MPRA Paper 73982, University Library of Munich, Germany.
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    8. Bonander, Carl & Jakobsson, Niklas & Podestà, Federico & Svensson, Mikael, 2016. "Universities as engines for regional growth? Using the synthetic control method to analyze the effects of research universities," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 198-207.
    9. Goldschlag, Nathan & Bianchini, Stefano & Lane, Julia & SanMartin Sola, Joseba & Weinberg, Bruce A., 2016. "Research Funding and Regional Economies," IZA Discussion Papers 10081, Institute of Labor Economics (IZA).
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    13. Bentsen, Kristian Hedeager & Munch, Jakob R. & Schaur, Georg, 2019. "Education spillovers within the workplace," Economics Letters, Elsevier, vol. 175(C), pages 57-59.
    14. Lee, Yoo Hwan & Graff, Gregory D., 2016. "Academic Knowledge Spillovers and the Role of Geographic Proximity in Regional Agriculture-related Sectors: The impact of agricultural research at Colorado State University on the Colorado economy, an," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235717, Agricultural and Applied Economics Association.
    15. Kaul, Ashok & Klößner, Stefan & Pfeifer, Gregor & Schieler, Manuel, 2015. "Synthetic Control Methods: Never Use All Pre-Intervention Outcomes Together With Covariates," MPRA Paper 83790, University Library of Munich, Germany.
    16. Andrea Bonaccorsi & Daniele Biancardi & Mabel Sanchez Barrioluengo & Federico Biagi, 2019. "Study on Higher Education Institutions and Local Development," JRC Working Papers JRC117272, Joint Research Centre (Seville site).
    17. Carl Bonander & Niklas Jakobsson & Federico Podestà & Mikael Svenson, 2016. "Universities as engines for regional growth? Using the synthetic control method to analyze the effects of research universities," FBK-IRVAPP Working Papers 2016-03, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    18. Kleis, Mischa & Moessinger, Marc-Daniel, 2016. "The long-run effect of fiscal consolidation on economic growth: Evidence from quantitative case studies," ZEW Discussion Papers 16-047, ZEW - Leibniz Centre for European Economic Research.

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    Keywords

    Land-Grant Universities; Short- and Long-Run Effects; Spillovers;

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