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How to Measure the Local Economic Impact of Universities? Methodological Overview


  • Kotosz, Balázs
  • Lukovics, Miklós
  • Molnár, Gabriella
  • Zuti, Bence


Today, the realization that certain economic units, such as universities or other large tertiary educational institutions have an impact on the economy of their region has gained prominence. There is a growing demand for precise studies on the economic impact of such entities, and the issue has attracted considerable attention in the scientific community. The examination of their economic impact is especially interesting when we compare regions with different levels of development, characterized by a successful international university. The different methods used in the literature render comparisons difficult; therefore, our focus is to recommend a method for investigating universities in different countries. In the absence of regional input-output matrices, a multiplier based approach is suggested for the first and second mission (education and research), while the application of a set of indicators is recommended for the third mission (knowledge transfer-related). There are several substantial problems in assessing the economic impact of universities. First, the definition of impact; second, measuring and estimating first-round expenditures and avoiding double-counting; third, estimating the model parameters (e.g. multipliers); fourth, the quantification of third mission activities. In this paper, we clarify theoretical definitions, resolve some contradictions, and consequently, recommend a feasible method considering the circumstances in Hungary.

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  • Kotosz, Balázs & Lukovics, Miklós & Molnár, Gabriella & Zuti, Bence, 2016. "How to Measure the Local Economic Impact of Universities? Methodological Overview," MPRA Paper 73725, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:73725

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    References listed on IDEAS

    1. Rubén Garrido-Yserte & María Gallo-Rivera, 2010. "The impact of the university upon local economy: three methods to estimate demand-side effects," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(1), pages 39-67, February.
    2. Laurent Gagnol & Jean-Alain Héraud, 2001. "Impact économique régional d'un pôle universitaire : application au cas Strasbourgeois," Revue d'économie régionale et urbaine, Armand Colin, vol. 0(4), pages 581-604.
    3. Jordi Molas-Gallart & Elena Castro-Martínez, 2007. "Ambiguity and conflict in the development of ‘Third Mission’ indicators," Research Evaluation, Oxford University Press, vol. 16(4), pages 321-330, December.
    4. Lukovics, Miklós & Zuti, Bence, 2013. "Successful Universities Towards the Improvement of Regional Competitiveness: "Fourth Generation" Universities," EconStor Conference Papers 156762, ZBW - Leibniz Information Centre for Economics.
    5. Bence Zuti & Miklos Lukovics, 2018. "Fourth Generation Universities and Regional Development," Nonpartisan Education Review, Nonpartisan Education Review, vol. 14(1), pages 1-1.
    6. Bo Göransson & Claes Brundenius, 2009. "Vitalizing the Swedish university system: implementation of the ‘third mission’," Science and Public Policy, Oxford University Press, vol. 36(2), pages 145-150, March.
    7. Melanie Blackwell & Steven Cobb & David Weinberg, 2002. "The Economic Impact of Educational Institutions: Issues and Methodology," Economic Development Quarterly, , vol. 16(1), pages 88-95, February.
    8. West, Guy R. & Jackson, Randall W., 1998. "Input-Output+Econometric and Econometric+Input-Output: Model Differences or Different Models?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 28(1), pages 1-16.
    9. Molnár, Gabriella & Zuti, Bence, 2015. "Egyetemek gazdaságfejlesztési hatásainak mérése
      [The Measuring of the Economic Impact of Universities]
      ," MPRA Paper 78277, University Library of Munich, Germany.
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    Cited by:

    1. Balazs Kotosz, 2016. "University impact evaluation: Counterfactual methods," ERSA conference papers ersa16p735, European Regional Science Association.

    More about this item


    impact study; university; Hungary;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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