Date of Graduation

Spring 5-16-2025

Document Type

Thesis

Degree Name

Master of Science in International and Development Economics (MSIDEC)

College/School

College of Arts and Sciences

Department/Program

Economics

First Advisor

Dr. Jesse Anttila-Hughes

Abstract

This paper studies the long-term effects of universities on local economic complexity, contributing to new evidence on how higher education institutions shape local productive capabilities over time. While extensive research documents universities’ positive impact on development, fundamental questions remain about the mechanisms through which they operate. Our study employs the Economic Complexity Index (ECI), a measure that captures the diversity and ubiquity of regional economic structures, to provide novel insights into universities’ influence on local economies. Building on Andrews (2023), we exploit historical natural experiments in university site selection during the 19th and 20th centuries in the U.S. Using cross-sectional data from 1990 – 2020, we find that university counties exhibit Economic Complexity Index scores approximately ½ standard deviations higher than counterfactual counties, persisting for more than one century and remaining stable over the three decades observed. Analysis of GDP outcomes reveals that university growth effects operate almost entirely through population growth. Our results contribute to understanding the role of anchor institutions in local development and provide important insights for policies aimed at improving regional competitiveness through higher education investments.

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