Do research universities boost regional economic development? -A case study of University of Science and Technology of China

ABSTRACT

This study examines the interactions between the presence of research universities and regional economic development, drawing on the event of the forced relocation of the University of Science and Technology of China. We analyze the development in the treated regions compared with a set of control regions that are created using the synthetic control method and find that research universities may slow regional economic development. We then perform a series of robustness checks, and the main results carry through. By using more exogenous shocks and a more rational identification strategy, our study provides new evidence that research universities do not necessarily boost regional economic development.

KEYWORDS:

• research universities
• regional economic development
• synthetic control method
• brain drain

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 The USTC is one of the top-ranked research universities in China. It has been selected for a number of key Chinese government support programs, including the ”DoubleFirst-Class Project”. In 2017, the Chinese government proposed to build world-class universities and first-class disciplines. Only 36 universities were selected and the USTC is one of them. According to China's Ministry of Education, the USTC spent 1.5 million RMB per capita on research in 2017, which is ranked first in China. According to the information provided by 2021 Academic Ranking of World Universities (ARWU), USTC is ranked 5th in China and 63rd in the world.

2 As of November 2019, the USTC has built 12 national research institutions, 4 national major science and technology infrastructures and 62 key research institutions at the hospital, provincial and ministerial levels.

3 Abadie (2021) provides a comprehensive explanation of the feasibility, data requirements, and methodological issues of synthetic control methods.

4 When we use all provinces whose data is available as donor pools, each excluded province provides a weight of 0 or tiny in synthetic Anhui. See Appendix B.1.

5 According to Goldstein and Renault (2004), the average income per worker is also a useful measure of regional economic development. Since in China, the data of the average income per worker is only available from 2006, we cannot use this measure. Given the high savings rate in China (Wei and Zhang 2011), we examine the impact of the USTC on the total deposits of Anhui, and the results are presented in Appendix B.2.

6 Given the limitations of the research methodology, choosing period from 1960 to 1990 ensures the unbiasedness of the estimation results, but considering the long-run effects are certainly important, we discuss it in Section VI.

7 When we experiment with a wide set of additional growth predictors, our findings do not change qualitatively.

8 The synthetic units are similar to Anhui in addition to the predictor variables. Moreover the distribution of universities in the region is also similar. In Guangxi province, there is only one research university, Guangxi University, which is ranked 94th in China and 701-800th in 2021ARWU; in Zhejiang province, there is only one research university, Zhejiang University, which is ranked 3th in China and 52th in 2021ARWU; in Inner Mongolia province, there is only one research university, Inner Mongolia University, which is ranked 120th in China and has no world ranking in 2021ARWU; in Hunan Province, there are two research universities, Central South University and Hunan University. Central South University is ranked 23th in China and 151-200th in 2021ARWU, Hunan University is ranked 32nd in China and 201st-300th in 2021ARWU; in Henan province, there is only one research university, Zhengzhou University, which is ranked 53th in China and 301-400th in 2021ARWU.

9 In history, Chinese universities follow the Soviet Union model. The vast majority of universities are public universities, supported and regulated by the administration. Ministries of education are the highest authority for all public universities, but they are often not involved in the specific management activities of universities, serving more of a guiding and supervisory role. Specific management activities are often carried out by assigning direct leadership departments or agencies to public universities, which are generally directly lead by the provincial governments in their regions.

10 https://zsb.ustc.edu.cn/12993/list.htm

11 https://zdzsc.zju.edu.cn

12 In Anhui, there are four listed companies with the USTC as the sponsor or main participant, which are “Time Publishing and Media Co., Ltd.”, “IFLYTEK Co., Ltd.”, “Guo Chuang Software Co., Ltd.”, and “CSG Smart Science & Technology Co., Ltd.”.

Additional information

Funding

The work was supported by the Humanities and Social Sciences Foundation of Ministry of Education of China [Project No. 18YJC790104]; National Social Science Fund of China [No. 18CJL012&21ARK004]; the Fundamental Research Funds for the Central Universities, and the Research Funds of Renmin University of China [No. 20XNH055&21XNLG03&19XNI002].