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TOPIC:
IDENTIFYING LOCAL SPILLOVERS FROM UNIVERSITIES: QUASI-EXPERIMENTAL EVIDENCE FROM URBAN CHINA
ABSTRACT
This paper identifies the local spillovers from universities by examining how increases in university size affect nearby innovation activities and firm productivity. We exploit the college expansion policy in China as a quasi-experiment for identification and conduct the empirical analysis at refined geographic levels with administrative datasets. We find that university activities increase nearby patenting, and the impact decays sharply with spatial distance. Further analysis suggests that universities boost firm productivity as well, but the spatial decay pattern is much muted. All together, our results indicate that universities generate strong spatially attenuating knowledge spillovers and a productivity boost to firms.