Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145215
Year of Publication: 
2016
Series/Report no.: 
IZA Discussion Papers No. 10081
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Public support of research typically relies on the notion that universities are engines of economic development, and that university research is a primary driver of high wage localized economic activity. Yet the evidence supporting that notion is based on aggregate descriptive data, rather than detailed links at the level of individual transactions. Here we use new micro-data from three countries - France, Spain and the United States - to examine one mechanism whereby such economic activity is generated, namely purchases from regional businesses. We show that grant funds are more likely to be expended at businesses physically closer to universities than at those farther away. In addition, if a vendor has been a supplier to a grant once, that vendor is subsequently more likely to be a vendor on the same or related grants. Firms behave in a way that is consistent with the notion that propinquity is good for business; if a firm supplies a research grant at a university in a given year it is more likely to open an establishment near that university in subsequent years than other firms.
Subjects: 
science policy
innovation
regional economic development
UMETRICS
JEL: 
O30
R10
Document Type: 
Working Paper

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