Are Elite Universities Losing their Competitive Edge?

Luigi Zingales, Adair Morse and E Han Kim

No 5700, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the location-specific component in research productivity of economics and finance faculty who have ever been affiliated with the top 25 universities in the last three decades. We find that there was a positive effect of being affiliated with an elite university in the 1970s; this effect weakened in the 1980s and disappeared in the 1990s. We decompose this university fixed effect and find that its decline is due to the reduced importance of physical access to productive research colleagues. We also find that salaries increased the most where the estimated externality dropped the most, consistent with the hypothesis that the de-localization of this externality makes it more difficult for universities to appropriate any rent. Our results shed some light on the potential effects of the internet revolution on knowledge-based industries.

Keywords: Faculty productivity; Firm boundaries; Knowledge-based industries; Theory of the firm (search for similar items in EconPapers)
JEL-codes: D85 I23 J24 J31 J62 L23 L31 O33 (search for similar items in EconPapers)
Date: 2006-05
New Economics Papers: this item is included in nep-edu, nep-his, nep-ino, nep-knm and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Related works:
Journal Article: Are elite universities losing their competitive edge? (2009)
Working Paper: Are Elite Universities Losing Their Competitive Edge? (2006)
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