Knowledge Shocks Diffusion and the Resilience of Regional Inequality

Arbeitspapier

This paper provides a simplified method of exploring the geographical limits of a knowledge shock over the long run. Using a geographically decomposable distanceweighed sum of world GDPs by county, differences in differences regression analysis shows that a new university will not only have a positive impact on the local economy, but also on the GDP of nearby counties. Furthermore, challenging the conventional wisdom that knowledge spillovers affect the local economy, this study provides evidence that the effect expands to the whole nation although its strength dilutes with distance. Consistent with the education literature, this investigation provides evidence that the shock will make the relative GDP of foreign competitors worse-off. Results are persistent in the long run, although the effect of time is also decreasing. Results are robust to potential endogeneity related to the self-selection of prosperous allocations for new academic institutions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: EHES Working Papers in Economic History ; No. 96

Classification and Topics

• Classification: Wirtschaft ; Economic History: Transport, Trade, Energy, Technology, and Other Services: U.S.; Canada: 1913- ; Regional Economic Activity: Growth, Development, Environmental Issues, and Changes ; Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
• Subject: New Economic Geography ; Spillovers ; U.S Counties

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): López-Cermeño, Alexandra
• Event: Veröffentlichung
• (who): European Historical Economics Society (EHES)
• (where): s.l.
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/247027
• Last update: 10.03.2025, 11:43 AM CET