Do Colleges and Universities Increase Their Region's Human Capital?

Journal of Economic Geography (Impact Factor: 3.26). 01/2009; 12(401). DOI: 10.1093/jeg/lbr020
Source: RePEc

ABSTRACT We investigate whether the degree production and research and development (R&D) activities of colleges and universities are related to the amount and types of human capital present in the metropolitan areas where the institutions are located. We find that degree production has only a small positive relationship with local stocks of human capital, suggesting that migration plays an important role in the geographic distribution of human capital. Moreover, we show that spillovers from academic R&D activities tilt the structure of local labor markets toward occupations requiring innovation and technical training. These findings demonstrate that colleges and universities raise local human capital levels by increasing both the supply of and demand for skill.

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    • "knowledge spillovers and network effects) from different types of organizations often positively influence the performance of high technology firms (Coenen et al., 2004; Döring and Schnellenbach, 2006; Gittelman, 2007; Kolympiris and Kalaitzandonakes, 2013a,b; Kolympiris et al., 2011) we include in both specifications variables that account for such potential influences. The first variable measures the number of universities that perform biotechnology related research and are located in the same MSA as the focal firm (UniversitiesInMSA ) and we expect a positive sign (Abel and Deitz, 2012; Anselin et al., 2000; Varga, 2000). As well, we account for potential proximity effects from the presence of VCFs and over-performing DBFs in the vicinity (Beaudry and Breschi, 2003; Gompers, 1995; Shane and Cable, 2002). "
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    ABSTRACT: A long stream of research has documented the positive effects that patents bring about to emerging firms in high technology industries. The general consensus is that patents contribute to firm growth because they confer monopolistic market rights, offer protection from competitors, increase the negotiating position of patent holders and other benefits. What has received relatively less attention in the literature is whether patents act as a signal that attracts investors such as venture capital firms. The handful of studies that have addressed that question has not analyzed whether the signaling function of patents decreases after the initial attraction of venture capital, as information asymmetries between investors and target firms reduce. In this study we hypothesize that patent activity has a signaling value that diminishes once information asymmetries between investors and funded firms lessen. To study our proposition we draw upon a longitudinal dataset of more than 580 U.S. – based biotechnology firms to empirically demonstrate that biotechnology firms that have submitted patent applications substantially increase the level of funding they receive for their first round of financing. In line with a reduction of information asymmetries once the initial investment has materialized, patent applications and granted patents have no effect on the growth of venture capital funds raised during the second round of financing. We conclude the study with a discussion of avenues for new research, implications for policy makers that consider the usefulness of the current patent system and with insights that can be employed by managers of firms in knowledge intensive areas such as biotechnology.
    Research Policy 07/2014; DOI:10.1016/j.respol.2014.01.006 · 2.85 Impact Factor
    • "In this context, colleges and universities can help to raise human capital levels in their region by increasing both the supply and demand for skilled labour (Abel and Deitz, 2009). This occurs as the presence of universities tilts the structure of local labour markets towards occupations that are more human capital intensive (Beeson and Montgomery, 1993; Faggian and McCann, 2006; Abel and Deitz, 2009). There is also a great deal of policy interest in the career paths of graduates, particularly in the light of recent government policy initiatives aimed at higher education in the UK. "
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    ABSTRACT: New university graduates are highly geographically mobile, but, as the literature has shown, often struggle in the labour market, working in non-graduate level jobs or in a field different from the one for which they are qualified. In this context, inter-industry moves can act as complements or substitutes for geographical moves, with graduates reacting to job mismatches by either changing location, industry, or both. Self-selection is also likely; industry movers may differ from non-movers in ways that also affect their career outcomes. We analyse the relationship between migration and inter-industry moves using longitudinal microdata for 7060 recent UK graduates.
    Journal of Economic Geography 02/2014; 15(2):353-385. DOI:10.1093/jeg/lbt043 · 3.26 Impact Factor
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    • "Consistent with previous work that finds the impact of R&D activities on firm creation to materialize within a narrow geographic scope, we measure the number of firm births at the same MSA where federal funds are allocated (Karlsson and Nyström, 2011; Samila and Sorenson, 2010). The MSA is used as the unit of analysis because it is small enough to capture the spatially bounded nature of localization economies and the tendency of spinoffs to locate close to parent organizations but it is large enough to exhibit independent economic activity (Abel and Deitz, 2012; Samila and Sorenson, 2011). Further, MSAs are generally more homogeneous across U.S. states 14 than cities or other geographic units which allows us to provide more meaningful comparisons across MSAs of rural and urban regions. "
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    ABSTRACT: A long stream of academic literature has established that public funding towards research and development matters for economic growth because it relates to increases in innovation, productivity and the like. The impact of public funding on the creation of new firms has received less attention in this literature despite theoretical constructs that support such association. In the present paper we study whether indeed there is a relationship between public research funds and local firm births in the context of the U.S. biotechnology industry. In doing so, we introduce a number of changes that strengthen the robustness of our findings when compared with existing literature. These changes include a direct measure of research expenditures and a considerably lengthier longitudinal dataset which allows us to capture a structural relationship and not a chance event. We empirically demonstrate that increases in the level of research funding from the National Institutes of Health towards biotechnology associate with increases in the number of biotechnology firm births at the Metropolitan Statistical Area level. Further, we reveal that public funds towards established firms associate with local firm births considerably more strongly when compared with funds towards universities and research institutes/hospitals. We conclude the paper with academic and policy implications of the present work that highlight the complexity of factors that underlie the creation of local firms in high technology industries.
    Research Policy 02/2014; 43(1):121–137. DOI:10.1016/j.respol.2013.07.012 · 2.85 Impact Factor
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