University competition and local development: a spatial approach

This paper argues that the contribution of university competition to local economic development is much richer than that generally reported by “knowledge spillover” studies. Using the population of 77 Italian universities and all 8,088 municipalities, our results indicate that there is a positive relationship between university competition and the employment rate at a municipality level. Specifically, using a gravity measure, we note that the closer are the universities to an area the greater is the effect of their level of competition on the local economic development. We also find that the quality and the diversity of such institutions increase the employment rate at a local level. Thus, this research indicates that the recent government policies to increase the level of competition among universities can have an impact on the economic growth of regions.

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