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International Inequalities in The Local Economic Impact of Universities: The Case of Hungary and France

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  • Balazs Kotosz

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  • Marie-France Gaunard-Anderson
  • Miklos Lukovics

Abstract

Nowadays the realization that certain economic units, universities or other objects have impact on the economy of their region comes more and more into prominence. A growing demand appears to generate more precise studies regarding the quantification of economic impact of these entities. The topic of the examination of economic impact is especially interesting and exciting when we can compare regions with different level of development, but with the presence of an internationally successful university. The local economic impact of a large tertiary education institution such as a university is an issue which has attracted considerable attention in literature. Different methods used in literature make results hardly comparable, we use the same method to investigate universities in different countries: in the lack of regional input-output matrices a multiplier based approach for first and second missions (education and research), while an application of Jongbloed?s indicator set for third mission. Generally, there are four substantial problems. First, the definition of impact, second, measuring and estimating first-round expenditures and avoiding double-counting, third, estimating the correct value of the multiplier, fourth, the quantification of the third mission activities. The economic impact study has become a standard tool used by Western universities to persuade state legislatures of the importance of expenditures on higher education. As economic impact studies become a political tool in the review of education, conservative assumptions and methods should be used to promote objectivity in the research process. The goal of our study is to unravel the effects and impact of the University of Szeged (Hungary) and the University of Lorraine (France) regarding their local economy. The topic is quite unique, as the NUTS2 regions in which the examined universities are located in a lagging behind region compared to national average, but per capita GDP is 3.6 higher in Lorraine. On the other hand these universities have the institutional ranking around the 500th place as published on the Academic Ranking of World Universities and employers of about 7000 employees. The socio-economic welfare of the region supposedly depends on the university in Hungary, nevertheless the same amplitude in France. The goal of the study is to attempt the quantification of this presumption. As our results show, the impact per student is in the same magnitude in both countries, however third mission is much more implemented in France. The reasons of this difference can be found in historical facts and in different level of economic development.

Suggested Citation

  • Balazs Kotosz & Marie-France Gaunard-Anderson & Miklos Lukovics, 2015. "International Inequalities in The Local Economic Impact of Universities: The Case of Hungary and France," ERSA conference papers ersa15p777, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa15p777
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa15/e150825aFinal00777.pdf
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    References listed on IDEAS

    as
    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, pages 39-67.
    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, pages 581-604.
    3. Árvai, Zsófia & Menczel, Péter, 2001. "A magyar háztartások megtakarításai 1995 és 2000 között
      [The savings of Hungarian households between 1995 and 2000]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 93-113.
    4. Siegfried, John J. & Sanderson, Allen R. & McHenry, Peter, 2007. "The economic impact of colleges and universities," Economics of Education Review, Elsevier, vol. 26(5), pages 546-558, October.
    5. J.A. Lewis, 1988. "Assessing the Effect of the Polytechnic, Wolverhampton on the Local Community," Urban Studies, Urban Studies Journal Limited, vol. 25(1), pages 53-61, February.
    6. Zuti, Bence & Lukovics, Miklós, 2014. "How to Measure the Local Economic Impact of the Universities’ Third Mission Activities?," MPRA Paper 77573, University Library of Munich, Germany.
    7. Lukovics, Miklós & Zuti, Bence, 2013. "Successful Universities Towards the Improvement of Regional Competitiveness: "Fourth Generation" Universities," EconStor Conference Papers 156762, ZBW - German National Library of Economics.
    8. Zuti, Bence & Lukovics, Miklós, 2015. ""Fourth Generation" Universities and Regional Development," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 14-31.
    9. 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.
    10. Ernesto Tavoletti, 2007. "Assessing the Regional Economic Impact of Higher Education Institutions: An Application to the University of Cardiff," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), pages 507-522.
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    More about this item

    Keywords

    regional economics; multipliers; university; economic impact;

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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