Urbanization, Productivity, and Innovation: Evidence from Investment in Higher Education

Posted: 30 Sep 2009

See all articles by Roland Andersson

Roland Andersson

Royal Institute of Technology (KTH) - Department of Real Estate Management

John M. Quigley

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased); University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased)

Mats Wilhelmsson

Royal Institute of Technology (KTH)

Date Written: February 1, 2009

Abstract

During the past two decades, Swedish government policy has decentralized post-secondary education throughout the country. We investigate the economic effects of this decentralization policy on the level of productivity and innovation and their spatial distribution in the national economy. We find important and significant effects of this investment policy upon economic output and the locus of knowledge production, suggesting that the decentralization has affected regional development through local innovation and increased creativity. Our evidence also suggests that aggregate productivity was increased by the deliberate policy of decentralization. Finally, we estimate the spillovers of university investment over space, finding that they are substantial, but that they are greatly attenuated. Agglomerative effects decline rapidly; roughly half of the productivity gains from these investments are manifest within 5–8 km of the community in which they are made.

Suggested Citation

Andersson, Roland and Quigley, John M. and Wilhelmsson, Mats, Urbanization, Productivity, and Innovation: Evidence from Investment in Higher Education (February 1, 2009). Journal of Urban Economics, Vol. 66, No. 1, 2009, Available at SSRN: https://ssrn.com/abstract=1480289

Roland Andersson

Royal Institute of Technology (KTH) - Department of Real Estate Management ( email )

Sweden

HOME PAGE: http://www.kth.se/abe/inst/fob/medarbetare/medarbetarepabyfa/1.20406?l=en_UK

John M. Quigley (Contact Author)

University of California, Berkeley, College of Letters & Science, Department of Economics (Deceased) ( email )

Berkeley, CA 94720-3880
United States
510-643-7411 (Phone)
510-643-7357 (Fax)

University of California, Berkeley, Haas School of Business, Real Estate Group (Deceased) ( email )

Berkeley, CA 94720-1900
United States

Mats Wilhelmsson

Royal Institute of Technology (KTH) ( email )

Lindstedtsvägen 30-100 44
Stockholm, SE-100 44
Sweden

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