Journal of Economic Geography, Vol. 4, No. 4, © Oxford University Press 2004; all rights reserved.
University decentralization as regional policy: the Swedish experiment
* Royal Institute of Technology, 100 44 Stockholm, Sweden. email 
rolanda{at}recm.kth.se
** Department of Economics, University of California, Berkeley, CA 94720, USA. email Quigley{at}econ.berkeley.edu
*** Royal Institute of Technology, 100 44 Stockholm, Sweden. email matsw{at}infra.kth.se
Abstract
During the past 15 years, Swedish higher education policy has emphasized the spatial decentralization of post-secondary education. We investigate the economic effects of this decentralization policy on productivity and output per worker. We rely upon a 14-year panel of output and employment for Sweden's 285 municipalities, together with data on the location of university-based researchers and students, to estimate the effects of exogenous changes in educational policy upon regional development. We find important and significant effects of this policy upon the average productivity of workers, suggesting that the economic effects of the decentralization on regional development are economically important. We also find evidence of highly significant, but extremely localized, externalities in productivity. This is consistent with recent findings (e.g., Rosenthal and Strange, 2003) on agglomeration in ‘knowledge industries.’
Keywords: agglomeration economies, knowledge spillovers, regional productivity,
JEL classifications: O31, N34, R11
Date submitted: 15 January 2003
Date accepted: 14 January 2004
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