CREAT: Census Research Exploration and Analysis Tool

University Innovation, Local Economic Growth, and Entrepreneurship

June 2012

Written by: Naomi Hausman

Working Paper Number:

CES-12-10

Abstract

Universities, often situated at the center of innovative clusters, are believed to be important drivers of local economic growth. This paper identifies the extent to which U.S. universities stimulate nearby economic activity using the interaction of a national shock to the spread of innovation from universities - the Bayh-Dole Act of 1980 - with pre-determined variation both within a university in academic strengths and across universities in federal research funding. Using longitudinal establishment-level data from the Census, I find that longrun employment and payroll per worker around universities rise particularly rapidly after Bayh-Dole in industries more closely related to local university innovative strengths. The impact of university innovation increases with geographic proximity to the university. Counties surrounding universities that received more pre-Bayh-Dole federal funding - particularly from the Department of Defense and the National Institutes of Health - experienced faster employment growth after the law. Entering establishments - in particular multi-unit firm expansions - over the period from 1977 to 1997 were especially important in generating long-run employment growth, while incumbents experienced modest declines, consistent with creative destruction. Suggestive of their complementarities with universities, large establishments contributed more substantially to the total 20-year growth effect than did small establishments.

Document Tags and Keywords

Keywords Keywords are automatically generated using KeyBERT, a powerful and innovative keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant keywords.

By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the text, highlighting the most significant topics and trends. This approach not only enhances searchability but provides connections that go beyond potentially domain-specific author-defined keywords.
:
economist, growth, employ, venture, entrepreneurship, innovation, department, university, institutional, innovative

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Internal Revenue Service, Standard Industrial Classification, Small Business Administration, Department of Defense, National Bureau of Economic Research, Columbia University, Harvard University, County Business Patterns, Census Bureau Longitudinal Business Database, University of Chicago, Longitudinal Business Database, Michigan Institute for Teaching and Research in Economics, Geographic Information Systems, North American Industry Classification System, Patent and Trademark Office, National Institutes of Health, Ewing Marion Kauffman Foundation

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