University Rankings Game and its relation to GDP per capita and GDP growth

In this paper, ARWU is used as a benchmark of World-Class Universities (WCUs). Universities that are among the Top 500 are considered World-Class Universities. The paper concludes that WCUs per capita (the number of World-Class Universities relative to the country’s population) is strongly related to the country’s GDP per capita. But WCU per capita has no effect on GDP growth. There is an obvious increase in the significance level when the ranking lists used to define WCUs are expanded from Top 100 to Top 500. This suggests that to attain a higher GDP per capita, it is therefore more important for a country to have more decent World-Class Universities (in the top 500) than having only a few elite World-Class Universities (in the top 100). When institutional factors are added into the regression model, clean government appears as the most important factor, followed by respect for property rights, business freedom, and investment freedom.