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Universities, Entry and Growth

Antonio Della Malva, Martin Carree and Enrico Santarelli

ERSA conference papers from European Regional Science Association

Abstract: The anecdotal evidence provided by the literature on high tech clusters has paved the way to systematic explorations of the localized effects of academic research on technological success and economic development. Prime drivers of such development are new entrants. New entrants are more likely to embark in the risky activity of developing new products and/or new processes, they often open up new markets, restructure existing ones, replace declining industries and reshape local markets. Studies on the relation between academic R&D and business entry have found modest effects of the former on the latter. Recent empirical findings in the field of technology transfer, however, suggest that quality of academic research and the entrepreneurial attitude by faculty be the main factors explaining economic relevance of academic R&D. In this study we test the hypothesis that knowledge spilling over departments conducting cutting-edge research generates higher entry in related technology-intensive sectors than lower standing departments. We thus explore the extent to which the quantity, quality and orientation of research carried on at universities stimulates differently market entry in high-tech and low-tech sectors and the consequences of entry (high and low tech) on economic growth. We use data on business entry in 103 Italian provinces (NUTS3) between 2001 and 2006; we relate entry to a battery of measures of university presence in the province: the number of students graduated in scientific disciplines in 2001, the scientific productivity of academics between 1985 and 1999 and the number of patents invented by academics between 1978 and 2000. We apply a three-equation recursive model where in the first place we estimate the contribution of universities to entry, both in high-tech and low tech sectors and secondly the effects of entry and universities on economic growth. Additionally, we include patents and trademarks to control for the existence of innovative activities from the private sector, the presence and relevance of industrial districts to account for industrial specialization, the quality of road infrastructures and the existence of business service providers to support the creation of new ventures.

Date: 2011-09
New Economics Papers: this item is included in nep-cse, nep-edu, nep-ent, nep-ino, nep-sbm and nep-tid
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