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Alexandra Lopez Cermeno . Photo

Alexandra Lopez Cermeno

Associate senior lecturer

Alexandra Lopez Cermeno . Photo

Knowledge shocks diffusion and the resilience of regional inequality

Author

  • Alexandra Lopez Cermeno

Summary, in English

This paper provides a simplified method of exploring the geographical limits of a knowledge shock over the long run. Using a geographically decomposable distance weighed sum of world GDPs by county, differences in differences regression analysis shows that a new university will not only have a positive impact on the local economy, but also on the GDP of nearby counties. Furthermore, challenging the conventional wisdom that knowledge spillovers affect the local economy, this study provides evidence that the effect expands to the whole national though its strength dilutes with distance. Consistent with the education literature, this investigation provides evidence that the shock will make the relative GDP of foreign competitors worse-off. Results are persistent in the long run, although the effect of time is also decreasing. Resultsare robust to potential endogeneity related to the self-selection of prosperous allocations for new academic institutions.

Publishing year

2016

Language

English

Publication/Series

Working Papers in Economic History

Issue

2016:03

Document type

Working paper

Topic

  • Economic History

Keywords

  • Economic History
  • Universities
  • Spillovers

Status

Published

ISBN/ISSN/Other

  • ISSN: 2341-2542