(2020). Heterogeneous Regional Innovation Spillovers of Universities of Applied SciencesEconomics of Education Working Paper Series 0161. Zürich: Universität Zürich, IBW - Institut für Betriebswirtschaftslehre.
Research shows that tertiary educational expansions positively influence innovation activities in regional economies. However, this finding is predominantly based on average effects, while potential heterogeneity in the innovation effects due to regional differences in economic preconditions is far less considered. Furthermore, most studies examine educational expansions linked to universities, i.e., traditional academic universities that focus on basic research. Less is known about the impact of educational expansions through universities of applied sciences (UASs), i.e., tertiary education institutions that teach and conduct applied research. We investigate the regional heterogeneity in the innovation effects from the quasi-random establishment of UASs in Switzerland. Relying on patent and business census data, we analyze the influence and importance of three economic preconditions-labor market strength, labor market density and high tech intensity-on the innovation effects of UASs. Our results show that only regions with a strong or a dense labor market or with an above average high tech intensity experience significant innovation effects of UASs. However, comparing the relative importance of the three economic preconditions, we find that the labor market strength is the most important factor that drives heterogeneity. These findings are particularly important for policymakers who are choosing the locations of tertiary education institutions.
