The regional significance of university locations in Lower Saxony

Universities are important economic actors in having a considerable impact on the demand and supply side of their local economy. The aim of this paper is to quantify, compare and classify the different economic demand- and supply-side contributions of the university locations within Lower-Saxony using a combination of multiplier analysis and spatial econometrics on a NUTS-3 level. In comparison to numerous other studies this paper does not focus on the economic impact of single cases or a selected university location but gives a complete picture of the importance and significance of all university locations within Lower-Saxony. The income induced direct and indirect demand effects are estimated with a rich data set from higher education statistics in combination with an income and employment multiplier derived from a regional input-output table while the supply-side effects, i.e. the impact of the education and research outcomes, are calculated by estimating with spatial panel regressions a model derived from human capital theory and knowledge spillover theory. The estimation results give a complete and reproducible impression of the importance and significance of the different university locations offering the opportunity for comparisons and classifications.