Regional development, quality of government, and the performance of universities

Luisa Alama, Joan Crespo, Miguel A. Márquez and Emili Tortosa-Ausina
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Luisa Alama: Universitat Jaume I and IIDL
Joan Crespo: Universitat de València
Miguel A. Márquez: Universidad de Extremadura

No 2510, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: We empirically evaluate how the efficiency of Spanish public universities impacts regional economic performance in Spain during the period 2010–2019. Efficiency is measured using activity analysis methods that attempt to capture reflect how universities perform in their respective missions— namely, teaching, research, and knowledge transfer. We analyse the geography of higher education by examining efficiency at the provincial (NUTS3) and regional (NUTS2) levels, as well as for groups of regions (NUTS1). Our results offer several key insights. First, we find that geography plays a differential role primarily when knowledge transfer activities are considered, while geographical patterns are similar for teaching and research activities. Second, the impact of universities’ efficiency on regional economic activity varies across different outcome measures. While provinces with more efficient public university systems show higher labor productivity and capital intensity levels, there is no significant relationship with per capita income. The spatial analysis indicates that efficiency gains generate indirect and positive spillovers, particularly for capital intensity, suggesting that improvements in university performance can benefit broader regional areas. Additionally, institutional quality, measured through regional government performance indicators, reinforces these effects. Our findings suggest that policies aimed at enhancing university efficiency should prioritise the research mission. Among the three university missions, research has the greatest impact on improving productive processes and is the most effective in fostering regional economic development.

Keywords: bias-corrected efficiency; capital intensity; higher education institutions; regional growth; productivity (search for similar items in EconPapers)
JEL-codes: C61 J24 R11 (search for similar items in EconPapers)
Date: 2025-10
New Economics Papers: this item is included in nep-cse, nep-eff, nep-geo, nep-ino, nep-inv, nep-lma, nep-sbm and nep-ure
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Working Paper: Regional development, quality of government, and the performance of universities (2025)
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