Research Policy 42 (2013) 788–800

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Research Policy
journal homepage: www.elsevier.com/locate/respol

University effects on regional innovation

Robin Cowan a,b,∗ , Natalia Zinovyeva c
a
BETA, University of Strasbourg, 61 avenue de la Forêt Noire, 67085 Strasbourg, France
b
UNU-MERIT, Maastricht University, Keizer Karelplein 19, 6211 TC Maastricht, The Netherlands
c
Institute of Public Goods and Policies (IPP-CSIC), Calle Albasanz 26-28, Madrid 28037, Spain

a r t i c l e i n f o a b s t r a c t

Article history: This paper analyzes empirically whether expansion of a university system affects local industry innova-
Received 30 June 2011 tion. We examine how the opening of new university schools in Italy during 1985–2000 affected regional
Received in revised form innovation. We find that creation of new schools increased regional innovation activity already within
19 September 2012
five years. On average, an opening of a new school has led to a seven percent change in the number of
Accepted 11 October 2012
patents filed by regional firms. The evidence suggests that the effect is mainly generated by high quality
Available online 24 November 2012
scientific research brought to the region with new schools.
© 2012 Elsevier B.V. All rights reserved.
Keywords:
University research
Regional innovation
Publications
Industry–university interaction

1. Introduction necessary to promote knowledge flows and innovation. These pol-

Between 1960 and 2000, there was a large expansion in univer-
sities in the industrialized countries. Early expansion was to deal
with the baby boom coming of university age; later expansion was
driven by the desire to increase the proportion of the population
receiving tertiary education.1 The clearest effect was just that: an
increase in the general education level of the labor force. Naturally,
a rise in student numbers tended to be accompanied by a rise in the
size of the professoriate and an increase in the sizes and numbers
of universities.
University expansion coincided with spectacular rise of innova-
tion activity in industrialized world. In 1963 the US Patent Office
granted around 45 thousand patents; by the end of the nineties the
yearly number of granted patents approached 160 thousand (Hall
et al., 2001). How to maintain this competitiveness and get more
innovation out of a knowledge system has become a hotly debated
issue. Following the line taken in the literature on innovation sys-
tems, it is often suggested that stimulating academic research and
close interactions between academia, industry and government are
icy suggestions are often based on the idea that universities have
within them some of the keys to increasing innovative activity.2
The fact that the increase of innovation activity during past
decades coincides with the increase in the size of the university sec-
tor might suggest that the innovation performance of an economy
is determined in part by the supply of universities in the innovation
system. This hypothesis motivates our analysis.
There have been many studies of the relationship between
universities and industrial innovation, particularly at the regional
level (see Section 2.1). The vast majority of these studies analyze
cross-sectional data, focusing on either the presence or size of
universities and the relationship with local innovation activity.
Generally, they document a strong relationship between university
research activity and industrial innovation. But there are well-
known difficulties in drawing conclusions from cross-sectional
analysis about phenomena that take place over time, so while the
results are suggestive, one must be cautious in drawing the “obvi-
ous” policy conclusions from them, particularly in terms of whether
opening new universities is a good idea. Additionally, endogene-
ity problems are rife in this kind of work – some of the effects of

∗ Corresponding author at: UNU-MERIT, Keizer Karelplein 19, 6211 TC Maastricht,

The Netherlands. Tel.: +31 0433884408.
E-mail addresses: r.cowan@maastrichtuniversity.nl (R. Cowan),
natalia.zinovyeva@csic.es (N. Zinovyeva).
1
According to the Global Education Digest 2009 by UNESCO Institute of Statistics,
the share of students in North America and Western Europe that enroll in tertiary
education during five years after the end of secondary education increased by 41
percentage points from 30% in 1970 to 71% in 2007.
2
An OECD 2007 report “Higher Education and Regions: Globally Competitive,
Locally Engaged” estimates that only 10% of UK firms currently interact with uni-
versities with most university–industry links focusing on big business and a few
hi-tech fields. The report concludes that “the potential of higher education institu-
tions to contribute to the economic, social and cultural development of their regions
is far from being fully realized”.

0048-7333/$ – see front matter © 2012 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.respol.2012.10.001
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
university–industry interaction are driven by supply of knowledge,
some by demand for it; external factors may drive both public and
private research output simultaneously; the location of universi-
ties and firms is often endogenously determined (Mairesse and
Mohnen, 2010) – all imply that identifying empirically the effect
of universities would ideally rely on exogenous shocks to univer-
sity supply. Such shocks are rare in real life and most studies rely
on strong assumptions to claim the existence of the supply-side
effects.
There was, however, a period of several years in the 1980s and
1990s in which Italy opened many new university schools in differ-
ent regions of the country.3 University expansion was centralized
and, as was acknowledged later by policy makers, the distribu-
tion of new schools across regions was largely independent of the
properties of the regional economy. In fact no significant corre-
lation can be observed between the number of new schools in
a region and regional characteristics including population, share
of graduates in the labor force, private and public investment in
research and development, and value added produced by differ-
ent economic sectors. We use this episode to ask directly whether
expanding university activity by opening new universities has an
identifiable effect on local industrial innovation. This is the first
issue we address in this paper.
The second issue has to do with the nature of the relationship
between universities and industrial innovation. There have been
several studies on the “channels” of interaction between univer-
sity and industry (see Section 2.2). By and large, these studies are
based on firm surveys, asking firms about their external sources of
knowledge or information. As one might expect, firms use many dif-
ferent channels for accessing university expertise: academic papers
or patents, conferences, seminars, consulting, and so on. But one
could frame the question in a slightly different way. What measures
of university activity help explain their effects on local innova-
tion? Scientific publications are thought to represent advances in
basic knowledge. Patents represent advances in applied knowl-
edge. Both of these activities indicate human capital capable of
producing novel knowledge, basic and applied respectively. We
construct measures of these activities using data from Thompson ISI
and the European Patent Office. Additionally though, universities
might possess other competences harder to quantify or describe,
for example skills or accumulated knowledge that can be applied
to issues other than creating novelty. These too could be of value
in industrial innovation activities. In the latter part of the paper we
perform an accounting exercise in an attempt to assess whether
the human capital associated with creating new basic knowledge,
creating new applied knowledge, or something different is what
drives the university effect on industrial innovation.
For two reasons we focus on the short-term effects of academic
research. First, it is likely that regional collaboration networks grow
fastest in the first few years after opening of new university schools.
Second, considering the short-run effect of universities allows us
to identify the direct influence of academic research on innovation
activity and to exclude other channels. In particular, it permits us to
avoid the issue of how graduates contribute to innovation.4 So by
3
In the Italian system teaching is organized into schools (facoltà) and research
is organized into departments (dipartimenti). Departments and schools may or may
not coincide. To simplify presentation, we refer only to “schools”, and our measure of
the date of opening of a new school is the year in which the first class was registered
within a newly formed school. This should not be read to imply that university
expansion affected only teaching. A new school in most cases implied creation of a
new department. This conflation of schools and departments, teaching and research
units, is not an issue for our analysis, as both measure university presence in the
region.
4
The effects of an increased quantity and quality of graduates in a region are
likely to be very diffuse and hard to identify. However, they do not emerge within
789
focusing on the short term effects, we can identify direct knowledge
spillover effects from university faculties to local industries.
Our results suggest that there is indeed a significant effect of
the creation of new university schools on regional research and
innovation activity. Industrial patenting increases following the
introduction of a new school to a region: on average, one new
school has led to about a seven percent increase in the number
of patents filed by regional firms five years later. But the quality
of patents produced as a consequence of university supply shock
is not different from the rest of regional patents. Given that the
level of development of a region affects its absorptive capacity,
one might expect that more developed regions with more inten-
sive R&D activity benefit more from interactions with universities.
However, contrary to this hypothesis, we find that less devel-
oped regions benefit more from university–industry interactions.
Regarding the second issue, we find that the number of academic
patents explains essentially none of the effect of universities on
innovation. Publications corrected for quality explain most of the
effect of universities on local industrial innovation. This suggests
that in order to increase regional innovation the intermediate pol-
icy goal should be to increase the amount of high quality academic
research carried out in the region.
The rest of the paper is organized as follows. Section 2 reviews
the existent empirical findings concerning the role of academic
research in innovation systems. Section 3 describes the data. Sec-
tion 4.1 introduces the empirical model and comments on the main
identification assumptions. The results of the empirical analysis are
provided in Sections 4.2 and 4.3. Finally, Section 5 concludes.
2. Background literature
2.1. Identifying the effect of university R&D
There exists a large literature analyzing the relationship
between academic research and industrial innovation activity. That
university effects on industrial innovation might be localized stems
from the nature of knowledge. While to a great extent the business
of universities is to produce codified knowledge, tacit knowledge
remains central in the diffusion process (see for example Cowan
et al., 2000). While codified knowledge can be diffused very widely,
and now very rapidly, tacit knowledge, by its nature, cannot. Jaffe
et al. (1993) showed that diffusion of the knowledge contained in
patents, which are by definition highly codified, has a strong geo-
graphical pattern – diffusion is very much local, and access to the
knowledge spreads geographically over time. Breschi and Lissoni
(2009) revisited this issue and showed that in fact it is social rather
than geographic distance over which the diffusion takes place. That
is, inventors learn about the existence of a patent (and presum-
ably the knowledge it contains) through their direct social contacts.
Since most social contacts are local, we can expect (geographically)
localized knowledge diffusion.
As early as the 1980s it was suggested that technology clusters
such as those in Massachusetts and California would be impossible
without the technology transfer from universities in these areas
(Saxenian, 1985; Dorfman, 1983). It was not long though, before
several case studies questioned the generality of the role of uni-
versity as an accelerator of regional innovation (Feldman, 1994a;
Rogers and Larsen, 1984) and suggested that various character-
istics of regional technological infrastructure (business services,
five years after a school opens: the official duration of most degrees in Italy (in
the period analyzed) is five years. But fewer than 20% of graduates complete their
education on time and, on average, students take two more years to graduate after
the end of the official program (Bagues et al., 2008).
790 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
technologically related firms, etc.) are necessary for development
of university research outputs.
To understand the magnitudes of possible effects of university
research on industrial innovation, Jaffe (1989) provided a more
aggregate econometric analysis. He used data for 8 years for 29 US
states to test whether there is an impact of university R&D on indus-
trial patenting, and found a significant positive effect. Several later
studies confirmed Jaffe’s finding, using firms’ product and process
innovations instead of patents as a measure of innovative activity
(Acs et al., 1992; Feldman, 1994b; Feldman and Florida, 1994).
The challenge that runs throughout the empirical literature
on technology transfer is the problem of identifying causation in
a system rife with endogeneity. A positive association between
academic research and industrial innovation may not necessar-
ily imply that universities increase local innovation activity. It is
quite possible that increases in university outputs are “caused
by” increases in industrial R&D and associated with easy access
to industrial inputs such as equipment or materials. A more
active industrial R&D sector may facilitate and stimulate university
knowledge production. Thus the causation may run in the oppo-
site direction, and if there is inertia in the variables (industrial
R&D and university papers and patents) as seems very likely to
be the case, then extracting the causal direction is difficult statis-
tically. Increases in university research production might also be
reinforced by the self-selection of academics able to benefit from
interaction with industry into highly innovative industrial districts.
This will introduce a bias into the types of activities of univer-
sities, changing the types of outputs depending on the nature of
local innovation activities. This would be consistent with results
showing a positive correlation between professors’ scientific out-
put (as measured by published papers), and their applied output
as measured by patents (Carayol and Matt, 2004; Stephan et al.,
2007). Again this causes problems for statistical understanding of
causation.
In order to address those endogeneity problems, Jaffe (1989)
estimated a system of three equations: the first equation charac-
terizing the effect of industrial and university R&D on patenting,
and two equations describing the determinants of, respectively,
industrial R&D and university R&D. To identify the model, Jaffe
assumed that industry R&D does not depend on the number of
private and public institutions and that university R&D does not
depend on manufacturing value added, once, respectively, univer-
sity and industrial R&D are taken into account. Thus the consistency
of Jaffe’s findings depends on the validity of these assumptions.
Econometric analysis of university effects on industrial innova-
tion at the regional level relies on the assumption that knowledge
diffusion and spillovers are geographically localized. Bottazzi and
Peri (2003) analyze the effect of total regional R&D on innovation
and find that in Europe the effect of R&D is very localized and
exists only within a distance of 300 km. Andersson et al. (2009)
provide evidence suggesting that spillovers from university invest-
ment might be even more localized. They analyze the effects of
changes in the Swedish university system and find that roughly half
of the productivity gains from aggregate university investments are
manifest within 5–8 km of the community in which they are made.
Some authors have claimed that the evidence of firms’ dispropor-
tionate location in areas close to universities already suggests that
the potential positive interactions between industry and university
are likely to be quite localized (Abramovsky et al., 2007; Audretsch
and Stephan, 1996). Still, there is also evidence suggesting that uni-
versity R&D might be related to patenting activity much further,
away following the collaboration networks of university professors
(Ponds et al., 2010).
Many studies at the firm level have confirmed that those firms
that collaborate with universities have higher propensities to inno-
vate (Loof and Brostrom, 2008; Zucker et al., 1998), especially in
those technological areas that require frontier scientific knowledge
(Hall et al., 2003).
Once again, even if the empirical evidence suggests that indus-
trial innovation and university research tend to cluster in the same
locations and university–industry collaborations are more frequent
in highly innovative firms, it is difficult to claim empirically that
the intensity of university research influences the innovativeness of
industrial sector, and not vice versa. Typically, one needs to rely on
observable characteristics, which could be used as controls, and to
assume that they are sufficient to exclude any correlated effect.
To be policy relevant, it is also important that the observed uni-
versity effect is not actually a crowding out effect of private R&D,
i.e. that university supply does not lead to a substitution of private
funding for public funding (Mairesse and Mohnen, 2010).
2.2. Transfer of knowledge and expertise
University research is conducted under a very different sys-
tem of incentives than is that in the private sector (Stephan, 1996;
Dasgupta and David, 1994). This could easily lead to the accumula-
tion of very different types of human capital and knowledge in the
two sectors, and thus raises the possibility of synergies between
them in innovation activity.
The most obvious competence associated with university
researchers is that aimed at expanding the knowledge frontier. This
has been the traditional research function of universities, and is
seen as perhaps the main activity of the professoriate. Publication
is traditionally the activity most highly valued in the univer-
sity setting. More recently, though, academic scientists have been
encouraged to produce applied knowledge. Here again, since the
aim has been to express this knowledge in terms of patents, novelty
is paramount. The types of human capital needed to produce these
types of novelty are likely to be well-proxied by publication and
patenting measures, and indeed, the literature on the channels of
knowledge communication between industry and university finds
that publications and patents, particularly the former, tend to be
important channels of communication.
Academic patents are often discussed, especially by policy mak-
ers, as one of the main channels of knowledge and technology
transfer from university. In part, this belief motivated the U.S. Bayh-
Dole Act (1980), which gave permission for US universities to patent
technology developed with federal funds. The underlying rationale
was that this should speed up technology transfer by bringing new
commercialization opportunities to the market.5 In Europe, many
universities have also recently adopted technology transfer poli-
cies. But at the same time, many academics expressed concerns
about potential detrimental effects of incentives to patent on the
type and the quality of the research output produced (Lundvall,
1992; Henderson et al., 1998). Contrary to the apparent belief of
policy makers, the empirical evidence tends to suggest that aca-
demic patenting per se is not a key channel of technology transfer
(Agrawal and Henderson, 2002; Arundel and Geuna, 2004; Cohen
et al., 2002; D’Este and Patel, 2007).
It is often argued that the transfer of university knowledge could
also be spread through the more traditional academic channels
such as scientific publications, seminars or face-to-face interac-
tions. In fact, publications (as well as co-publishing with industry)
are often found to be among the most important channels of knowl-
edge transfer from academia, as perceived by survey respondents
(Cohen et al., 2002; Cassiman et al., 2008; Bekkers and Bodas Freitas,
2008). While publication is necessarily strongly correlated with the
5
Market failure theory suggests that due to the public good nature of knowledge,
private companies have little incentive to invest in developing an invention that is
not protected by a patent.
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
ability to produce frontier knowledge, other channels discussed
in that literature may be much less so. Conferences, workshops,
consulting and so on may be avenues for transmitting something
other than cutting-edge knowledge. Academics may have general
Number of new schools
analytic or synthetic skills that can be used for things other than
publishable research; they have (in principle at least) pedagogic
skills gathering, synthesizing, codifying and delivering existing
knowledge. All of these could be transferred or facilitate transfer
of useful knowledge.
One challenge arising from this literature stems from the sug-
gestion that subjectiveness of survey responses can lead to very
different opinions about channels’ importance, depending on who
is asked to evaluate it. For instance, Bekkers and Bodas Freitas
(2008) compare perceptions of the importance of academic patents
(among other things) as a channel of technology transfer among
academics and private sector R&D workers and report that the
private sector considers them to be twice as important as does
academia. In this paper we avoid this problem and do not focus
on channels of transfer, rather we use an accounting procedure to
address the issue of different types of knowledge flow.
2.3. This study in the literature, and hypotheses
The extent to which knowledge flows from university affect
regional innovation and which type of academic expertise matters
in this respect, are important empirical questions. Still, as discussed
above, empirical analysis of these issues faces several methodologi-
cal problems related to the identification of the effects of university
research. The presence of those problems often opens a window for
criticism of the recent empirical findings on university effects on
industry.
In what follows we perform a statistical analysis to examine
whether a rapid growth of the university system in Italy had an
effect on local industrial innovation activity. University schools cre-
ation in the 1980s and 1990s was part of a plan to expand education
supply, adopted by the Italian government in the beginning of the
1980s.6 The plan sought to unburden over-crowded universities
and to improve graduation rates.7 We exploit the fact that, as we
show in Section 4.1, the rationale of this rapid university expansion
and consequently the timing of new university openings was inde-
pendent of the demands of local innovation systems. This allows us
to avoid many of the endogeneity problems typically attendant on
this type of study.
The focus on Italy is especially relevant since it is one of the
countries that has to catch up with other European countries in the
level of innovation activity in firms. According to the Community
Innovation Survey (CIS) 2008, Italy still lags behind the majority of
European countries in the percentage of firms that innovate.
Finally, we explore which type of academic knowledge and
expertise is effectively transferred to industry. In particular, we
are interested in understanding the extent to which industrial
6
Some new university openings were already approved in the late 1970s. How-
ever, the substantial reform came with law n. 382 11/7/1980, which provided that
any variation in the existing university supply should be included in a development
plan (piani triennali), to be approved by the Minister of Education every three years
(Law no. 590 14/8/1982). Some autonomy was introduced starting from 1995. For
more details see Bratti et al. (2008).
7 indicator of university–industry collaborations (such as the num-
In most cases the new schools were opened within previously existing uni-
versities, but often located in different towns. With time some of these schools
became independent universities (for example, what is now the University of East-
ern Piedmont was founded in 1998 on the basis of schools of the University of Turin
located in Vercelli, Alessandria and Novara). In a few cases the new units appeared as
a result of the split of over-crowded universities in big megalopolises (the University
of Rome III was founded in 1992 simply by taking part of the staff from Univer-
sity of Rome La Sapienza). There are very few examples of opening completely new
universities from scratch (one such is the University of Teramo, founded in 1993).
791
12
10
8
6
4
2
0
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Year
Fig. 1. Annual number of new university schools (excluding schools in humanities
and social sciences), 1985–2000.
innovation is affected by the activities and human capital associated
with professors’ publishing as opposed to those associated with
the more applied activities associated with patenting. The answer
to this question can help universities and policy makers to make
judgements about the alignment of existing incentive structures in
academia to the necessities of local industries.
3. Data and variables
The analysis is performed using Italian data at the regional level.
The database includes characteristics of the university system, indi-
cators of industrial and academic innovation activity and economic
indicators observed for 20 Italian regions between 1984 and 2000.
Our main indicator of the university presence in the region is
the number of university schools in science, medicine and engineer-
ing. We consider the date students were first enrolled in the degree
program of the school as the date of the creation of this school. Infor-
mation about the number of first-year students at the school level
was obtained from different issues of the Italian National Statistical
Bureau bulletins (L’università in cifre and Lo Stato dell’Università).8
According to this definition, 65 schools in science, medicine and
engineering were opened for enrollment between 1985 and 2000.
(Fig. 1 describes the dynamics of university expansion across time
and Fig. 2 shows the geographical distribution of new schools.) Out
of the total of 65 new schools, 29 schools were in civil and industrial
engineering, 12 in sciences, 11 in agriculture and veterinary, and
13 in medicine, pharmaceutics and chemistry. The average Italian
region has nine schools and every fifth region in a given year opened
a new school (Table 1).
The number of schools might seem too aggregate an indica-
tor of university presence, since schools can vary considerably
by size. However, we have sufficient evidence to believe that the
variation in the number of schools was exogenous to regional
innovation activity and the dynamics of other factors affecting
innovation. By contrast, the number of professors hired by these
new schools is likely to have been determined by the demand for
education. This demand could be correlated with the innovation
activity in the region. So the number of professors is unlikely to
be an exogenous shock. Similarly to the case of school size, any
ber or size of university technology-transfer offices) would suffer
8
The data are available from 1984 from the printed annual editions of L’università
in cifre and Lo Stato dell’Università (available in most university libraries in Italy).
Data for years from 1988 on were accessed at http://ionio.cineca.it, in November
2007.
792 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800

Table 1
Descriptive statistics.

(1) (2) (3) (4) (5) (6) (7) (8)

All regions North Center South

Mean Std. dev. Mean Std. dev. Mean Std. dev. Mean Std. dev.

Schools: 9 6 9 7 10 4 8 5
Engineering 2 2 2 2 2 2 3 2
Sciences 2 1 2 1 2 1 2 1
Medicine, Chemistry and Pharmacy 3 2 3 3 4 1 2 2
Veterinary and Agriculture 2 1 1 1 2 1 2 1
New schools opened in 1985–2000: 0.20 0.55 0.20 0.53 0.16 0.46 0.24 0.62
Engineering 0.09 0.35 0.08 0.30 0.09 0.33 0.11 0.41
Sciences 0.04 0.19 0.04 0.19 0.04 0.19 0.04 0.19
Medicine, Chemistry and Pharmacy 0.04 0.21 0.05 0.25 0.01 0.11 0.05 0.23
Veterinary and Agriculture 0.03 0.18 0.03 0.17 0.03 0.16 0.04 0.21
Publications 1020 1111 1308 1238 1260 1257 521 527
Citations per publications 17 5 17 5 18 3 15 6
Patents: 142 241 284 327 80 73 22 25
Academic patents 7 12 13 17 8 9 2 3
Industrial patents 134 230 272 311 72 65 20 22
Citations per patent: 0.67 0.46 0.72 0.37 0.67 0.43 0.60 0.56
Academic patents 0.78 1.29 0.97 1.24 1.16 1.66 0.63 0.62
Industrial patents 0.66 0.47 0.72 0.36 0.60 0.36 0.34 0.78
Non-patent literature (NPL) citations per patent 0.66 0.88 0.41 0.33 1.02 1.12 0.70 1.03
Academic patents 2.3 3.34 1.99 2.10 3.67 4.62 1.66 3.04
Industrial patents 0.48 0.69 0.33 0.29 0.68 1.06 0.48 0.63
Private R&D investment, mln euros 229 421 439 582 147 205 48 59
Public Non-University R&D investment, mln euros 90 188 76 71 199 341 27 29
Public University R&D investment, mln euros 150 128 154 125 186 140 119 117
Population, mln 2.4 1.8 2.7 2.3 2.1 1.4 2.1 1.6
Population of 19-olds in total population, % 15.7 4.2 13.3 3.4 15.0 3.7 18.9 3.3
University graduates in the labor force, % 7.6 2.2 6.9 2.1 8.3 2.5 7.9 1.8
VA per capita, thousand euros: 14.8 5.5 18.1 5.5 14.9 4.6 11.0 3.3
Industrial VA in total VA, % 21.9 7.5 25.7 7.7 23.1 6.7 16.7 4.3
Services VA in total VA, % 67.2 6.7 65.2 7.3 67.4 7.3 69.4 4.7
Agriculture VA in total VA, % 4.3 2.0 3.1 1.2 3.6 1.3 6.1 1.6
Construction VA in total VA, % 6.6 2.1 6.1 1.9 5.9 1.7 7.8 2.1

Notes: (*) Total number of regions is 20. Regions classified as “Northern” are Piedmont (PIE), Aosta Valley (AOS), Lombardy (LOM), Friuli-Venezia-Giulia (FVG), Trentino-Alto
Adige (TAA), Veneto (VEN), Emilia-Romagna (EMR), Liguria (LIG); regions classified as “Central” are Tuscany (TUS), Umbria (UMB), Marche (MAR), Lazio (LAZ), Sardinia (SAR);
regions classified as “Southern” are Abruzzo (ABR), Basilicata (BAS), Calabria (CAL), Campania (CAM), Molise (MOL), Apulia (APU), Sicily (SIC). Mean values for the period
1984–2000.

from endogeneity.9 An additional problem of indicators of formal
collaborations is that they unavoidably miss the important com-
ponent of informal collaborations (Link et al., 2007).10 All these
arguments justify our focus on the number of university schools as
an indicator of university presence in the region.
We measure regional innovation productivity by the number of
patents registered in the European Patent Office, using the loca-
tion of inventors to determine the region where the patent is
produced.11,12 In order to disentangle the knowledge spillover
effect of universities from the direct effect of university R&D invest-
ment on patenting and the crowding out effect, we split patents into
two groups: those that are produced with university participation
(or academic patents), and the rest (industrial patents). Note that
until recently it has been difficult to attach patenting activity to
university research. In fact, in contrast to the US case, up to the
present, in Italy universities did not generally retain the property
rights on inventions done by their researchers. Often “IPRs over
inventions derived from sponsored research programmes were left
9
In Italy, there were almost no universities that adopted a patent or technology
transfer policy until 1996 (see Baldini et al., 2006), so this is not an option for our
analysis.
10
However, it is likely that the intensity of informal collaboration is correlated
with formal collaboration activities due to potential complementarities (Cohen et al.,
2002; Grimpe and Hussinger, 2008).
11
Specifically, the database includes all patent applications that passed a prelim-
inary examination in the EPO. The assigned date of the patent is the priority date,
which is the date of the first filing world-wide.
12
Patents with inventors from two different regions are counted twice.
to the sponsors” (Balconi et al., p. 133). The recent KEINS EP-INV
database on academic patenting (Lissoni et al., 2006) matches the
names of the inventors of the patents with a list of university pro-
fessors. Thanks to this methodology, the KEINS database includes
not only any patent owned by universities, but also all patents that
involve university scientists, whether the patents are owned by
firms, public research organizations, universities, or the scientists
themselves. In the following we use the KEINS database to identify
industrial and academic patents. We observe that an average region
produced annually 142 patents, seven of which were produced with
the participation of academic inventors.
We measure the quality of innovation by the average num-
ber of citations received by these patents before 2004. Naturally,
series on patent citations are subject to a truncation bias since
the number of citations any patent receives grows with time, and
our data include citations received only until 2004.13 We correct
for truncation bias following the method developed by Jaffe and
Trajtenberg (1996) in the version where the diffusion process is
assumed to have the same shape in all technological sectors.14 Fig. 3
shows the evolution of the number of patents, patent citations and
corrected citations in industrial and academic sectors. Patents, both
13
More precisely, citation variables count the number of citations received by
regional patents from all Italian patents until 2004.
14
Results of our analysis are not affected if instead we simply use a 5-year window
for patent citations.
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
(4,8]
(2,4]
[0,2]
Fig. 2. Location of schools created during 1985–2000 across Italian regions. The
colors indicate numbers of schools opened: dark gray indicates that between 5 and
8 schools were opened in the region over the entire period; light gray, 3 or 4; pale
gray, between 0 and 2.
industrial and academic, and citations to them grew steadily over
the period.15
Information on professors’ publication records are obtained
from ISI Web of Science. We use all publications from 1984 to 2000
having at least one coauthor with an Italian affiliation. We observe
citations received by these publications up to 2009. An average Ital-
ian region has produced more than a thousand publications a year;
on average a publication has received about 17 citations.
The extent to which technological innovations rely on scientific
knowledge is measured by the propensity of patents to cite non-
patent literature (NPL). Not surprisingly, we observe that patents
with inventors from academia draw more on scientific knowledge
than pure industrial patents (column 1, Table 1).
We use information from the Italian National Statistical Bureau
on several regional characteristics including private and public
spending on research and development, value-added produced by
different economic sectors (industry, services, agriculture and con-
struction), population, population aged 19, and the proportion of
university graduates in the labor force. We apply the depreciation
coefficient used by Gordon (1990) (19.3%) to the time-series of R&D
investment in order to construct an indicator of the stock of R&D
facilities available in a region.
Note that the intensity of innovation activity is very heteroge-
neous across Italian regions (columns 3–8, Table 1). Between 1984
and 2000, regions in the North of Italy were investing almost ten
15
Other ways to treat the truncation bias in citations are discussed in the Appendix
A.
793
times more in R&D than Southern regions. These differences are
also reflected in the number of patent applications made by inven-
tors from these regions. The gap in the innovation activity across
these regions is not due to the size effect: there are no impor-
tant population differences across the regions. There are also no
substantial differences in university presence or in the educational
level of the labor force. Broadly put, the differences in the innova-
tion activity could be attributed to a relatively low income level in
the South and to differences in industrial structure: in the North
manufacturing has a larger weight in the economy than in the
South, whereas in the South the service sector and agriculture are
relatively more important.16
4. Empirical analysis
We start by observing simple correlations between the num-
ber of new schools opened in a region and the variation in various
indicators of research and innovation activity (Table 2). First, we
analyze whether the opening of new schools is associated with
an increase in academic research activity. We find that university
expansion is associated with the growth of university R&D stock
in the region observed about two-five years later (column 1). Sim-
ilarly, higher university presence is associated with the rise of the
number of scientific publications even within the next three years
(column 2). We do not observe any clear (significant at standard
level of 5%) relationship between university expansion and the
growth of academic patenting within first five years (column 3).
Second, we analyze the relationship between university expan-
sion and the growth of industrial innovation activity. We find that
there is a positive correlation between university expansion and the
growth of industrial patenting a few years later (column 4), even
though new university units are not associated with the growth of
private R&D and income per capita (columns 5 and 6).17
Though suggestive, the results in Table 2 should be considered
with caution. In principle, the creation of new schools might be not
independent of regional innovation activity. In addition, the above
correlations could be confounded by characteristics of the economy
which vary simultaneously with university expansion and regional
innovation. In the following we make explicit the assumptions of
our identification strategy and analyze the above findings in more
detail.
4.1. Empirical model and identification strategy
The main problem we seek to address is the possibility of circular
causation between university research and industrial innovation.
In order to address it, we analyze and build upon the standard
reduced-form relationship between industrial innovation output,
Pi,t , and the number of schools in the region, Ui,t ,
Pi,t = ˛ + ˇUi,t + Xi,t ␥ + ct + ci + i,t (1)
The simplest way to avoid potential simultaneity problem in model
(1) is to consider the right-hand-side variables – including univer-
sity presence – with a time lag. The time lag between university
presence and innovation activity could be also justified since the
effects of institutional changes could take time to realize (see the
above findings in Table 2). Below we consider the right-hand-side
16
Evangelista et al. (2001) also observe that, according to the 1995 wave of the
Community Innovation Survey, there are very few science-based firms in the South.
Regionally disaggregated data are not available in later CIS waves.
17
Note that the difference between the effect of new schools on industrial patent-
ing observed in years 3, 4, and 5 is not statistically significant. Throughout the paper,
we adopt the conventional level of significance – p-value less than 5%. The estimates
with p-value between 5% and 10% are considered as marginally significant.
794 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800

Table 2
Correlation between new school opening and variations in the indicators of private and public research activity.

Number of years after (1) (2) (3) (4) (5) (6)

school opening
University R&D stock Publications Academic patents Industrial patents Private R&D stock VA per capita

−2 n/a −0.074 0.025 −0.036 0.042 0.099

−1 −0.173 0.005 −0.103 −0.058 0.018 0.001
0 0.184 0.031 0.130* 0.021 −0.020 −0.061
1 0.189 0.155** −0.132* −0.056 −0.021 −0.074
2 0.267** 0.226*** −0.072 0.006 −0.034 −0.112
3 0.287*** 0.111* 0.032 0.141** −0.018 −0.039
4 0.250*** 0.016 0.059 0.096 0.006 0.046
5 0.249*** 0.071 0.011 0.142** 0.016 −0.036

n/a: not available.

*
p-Value <0.100.
**
p-Value <0.050.
***
p-Value <0.010.

variables with a 5-year lag. Nevertheless, given the presence of
strong autocorrelation in the data, lagging independent variables
is likely to be insufficient to avoid endogeneity.
In order to capture some differences across regions, we include
an extensive list of observable regional characteristics among the
controls, Xi,t . The size of the region – both in terms of population,
especially younger population, and in terms of economic produc-
tion – may reflect inherent local demand for higher education as
well as the propensity to innovate. Therefore we control for popu-
lation, the proportion of 19 year olds, and aggregate value-added.
Industrial composition affects the propensity of a region to patent.
This in turn may affect the value of certain types of high-skilled
human capital and so the ability of a region to lobby the central
government for more university resources. Thus, we control for
proportions of regional value-added in industry, construction, ser-
vices and agriculture. An additional control for industrial structure
is the share of graduates in the local labor force. Public non-
university R&D and private R&D both affect industrial patenting,
and may reflect a general attitude towards the value of knowl-
edge production and training, thus again affecting the ability to
lobby for more university resources. We include both controls in
our estimations.
University expansion was stronger in the 1990s than in the
1980s, coinciding with the rapid growth of innovation activity (see
Figs. 1 and 3). In other words, the timing of university expansion
generally might be not independent of the time trend affecting
innovation activity, ct . In order to account for time effects influenc-
ing all regions simultaneously, we introduce a set of year dummies
among the controls.
Notwithstanding the inclusion of the above controls, one might
suspect that regions differ on other perhaps non-observable dimen-
sions, and these differences might explain both the university
presence in the region and the development of innovation activ-
ity. In other words, unobserved regional effects, ci , might be
correlated with university presence. Given the panel structure of
our data, we can account for ci in two ways: using a fixed effect
estimator (or, equivalently, including the regional dummies among
controls) or using a difference estimator. Below we report results
obtained using the first-difference estimator. We note, though, that
fixed effect estimation produces results that are statistically simi-
lar to the ones presented here. We prefer the difference estimator
to the fixed effect specification since the former does not require
strictly exogenous regressors (that is, it does not require that indus-
trial innovation has no impact on future right-hand-side variables
included in Xi,t , such as value added and R&D) (Wooldridge, 2002).
With regard to the count nature of our dependent variable, in the
following we adopt the traditional approach of modeling regional
innovation activity using a log–log relationship between university
presence and regional patents (Jaffe, 1989; Feldman and Florida,
1994). We prefer this model to a negative binomial specification
for two reasons. First, given that the mean number of regional
patents is quite high (134 patents, see Table 1 for more details),
the negative binomial distribution is essentially normal and the
log–log model provides a good approximation. Second, the linear
model permits capturing region-specific effects without imposing
the strong exogeneity assumption. Performing a negative binomial
estimation with predetermined regressors requires a GMM esti-
mation for which our sample size is not sufficiently large (Blundell
et al., 2002).
Ultimately, our identifying assumption is that the error term,
i,t , is uncorrelated with university presence in the region once
regional time-invariant effects, time effects and observable time-
varying characteristics are taken into account. In other words, we
assume that during the analyzed period no variations in regional
characteristics (apart from the ones included in Xi,t ) affected both
the variation in the number of university schools and the varia-
tion in the regional innovation 5-years later. Is this assumption
justified?

Fig. 3. Evolution of academic (left panel) and industrial (right panel) innovation outcomes in Italy, 1985–2000.
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
Fig. 4. Number of new schools opened between 1984 and 2000 by regional demand
for corresponding professions.
To answer this question we need to understand the factors that
influenced university expansion. As was acknowledged by policy
makers ex post, the distribution of new units across the regions
was largely independent of regional labor market demands. The
openings seemed to be associated with an indiscriminate allocation
of funds across the regions. In this regard, the Observatory for the
evaluation of the university system in the Ministry of Education
and Research (MURST) after analyzing the expansion of university
system in the beginning of 90s concludes:
The rules by which new institutions were created does not seem
to have followed any logic tailoring university development to
territorial specificities. It seems not to have made reference to
a demand for university education (that is, responding to the
potential scope of use of the new initiatives), nor does it seem
to have made reference to the demand for graduates (the for-
mative needs of the country) or to existing infrastructure. In
substance, no rigorous evaluations of the initiatives were done,
either in absolute terms, or concerning compatibility with the
rest of the system. The criterion actually favored was geograph-
ical re-equilibrium, which aimed to bring the offer of university
education and subjects near to the demand, ignoring not only
the “real” size of this demand (which sometimes turned out to
be less than the minimum requirements for the initiative to be
efficient and effective), but also the importance of the trans-
portation system, the receptive capacity of the population of
students and students’ financial support in determining access
to university establishments. So, [. . .] at least to a large extent,
the prevalent logic was the one of incremental expansion and
distribution “by drops of rain”, without evaluating other ini-
tiatives that were suppressed [. . .]. (p. 3, Verifica dei piani di
sviluppo dell’universita 1986–90 e 1991–93, Osservatorio per
la valutazione del sistema universitario, MURST, 1997; authors’
translation).
This evaluation of the Italian Ministry of Education and Research
supports our identifying assumption. In Table 3 we also analyze the
contemporaneous correlation between observable regional charac-
teristics included in Xi,t and university expansion. Consistent with
characterization done by the Italian Ministry, observable regional
characteristics in the analyzed period seem to be poorly correlated
with university expansion. Correlation between the number of new
schools and the contemporaneous dynamics in observed regional
characteristics, including the growth of regional patents, is very
poor as well.
Similarly, the opening of new schools does not seem to be related
to the demand for particular professions. In Fig. 4 we plot the degree
795
of the fit of educational supply to local demand for skilled labor
in a region-discipline (measured as the number of new graduates
incorporated in the labor force over the number of new gradua-
tes from local universities) versus the number of new schools in
each region-discipline.18 An economically driven policy might aim
to locate schools in regions that were importing skilled labor, lead-
ing to a positive correlation between university expansion and our
measure of the fit of educational supply. Visually, no positive corre-
lation is apparent, and indeed, the correlation between educational
fit and the number of new schools in a corresponding discipline
and region is on aggregate −0.055. Again, this is consistent with
the MURST analogy between school creation and drops of rain.
Overall, the above evidence implies that exploiting the variation
in the number of schools within regions across time allows con-
sistent estimation of the effect of university presence on regional
innovation.
4.2. Regional innovation activity
Quantity. The estimation results for model (1) with innovation
activity being measured by the (log) number of industrial patents
are presented in Table 4. We find that opening a new univer-
sity school significantly increases regional innovation activity. The
coefficients here are elasticities, so an increase of one percent in the
number of schools in a region increases industrial patenting in that
region by 0.68 percent. The mean number of schools per region
is nine, and the mean number of patent applications per region
per year is 134 (Table 1), so on average, one new university school
brings about ten new patent applications by regional non-academic
inventors five years later.19
Quality. The number of patents might be an appropriate indi-
cator to capture the quantity of innovation, but it might hide
important changes in quality. An observed increase in the quantity
of patents as a result of a new university school in a region does
not guarantee that the overall value of regional innovation activity
grows. Therefore it is important to analyze the effect of universities
on the quality of the patents produced.
We check for effects on average patent quality, measured as
the average number of citations received by regional patents. Evi-
dence exists suggesting that patent citations represent a valid way
to capture patent importance. (See Jaffe et al. (2000) for exam-
ple.) Specifically, we estimate Eq. (1) using the average number of
citations to regional industrial patents as the dependent variable.
Results are presented in column 2 of Table 4. Opening a new school
has no significant effect on the number of citations per regional
patent.
One might also ask whether not just the quality, but also other
patent characteristics have changed. For instance, one might be
interested to know whether the presence of a university affects the
rate with which industrial innovation draws information directly
from scientific publications. We use non-patent-literature (NPL)
citations done by industrial patents to capture this patent char-
acteristic. This is a very noisy measure (not least because many
citations are actually added by patent examiners (Akers, 2000)),
but it can nevertheless reflect any substantial changes in inventors’
reliance on scientific publications and basic knowledge. Still, we
do not observe any significant effect of new schools on the nature
18
New school openings are for the period from 1985 to 2000. The mismatch ratio
uses data from the triennial Italian National Statistical Bureau (ISTAT) representative
survey of graduates, the 1995 edition, which surveys students graduating in 1992.
It covers information concerning graduates’ university-to-work transition, asking,
inter alia, where and in what discipline they graduated, and where they work. The
description of the data could be found in Bagues et al. (2008).
19
See the Appendix A for robustness checks.
796 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800

Table 3
Cross-correlation table.

Table 4
The effect of the university expansion on industrial patents.

(1) (2) (3)

Log patents Citations per patent NPL citations per patent

Log Schools 0.68*** −0.11 −0.27

(0.21) (0.32) (0.41)
Log population 0.15 2.37 −2.41
(2.67) (5.74) (3.95)
Population of 19-olds in total population 0.08 0.25 0.15
(0.16) (0.23) (0.16)
Share of graduates in the work force 0.01 −0.05 −0.06
(0.07) (0.17) (0.21)
Log private RD stock 0.19** 0.31** −1.07**
(0.09) (0.13) (0.41)
Log public (non university) RD stock 0.31 −0.79* −0.88*
(0.23) (0.40) (0.48)
VA per capita −0.04 0.04 −0.08
(0.13) (0.12) (0.19)
Share of VA produced in industrial sector −0.02 0.13* −0.05
(0.04) (0.07) (0.06)
Share of VA produced in agricultural sector 0.08 0.07 −0.23**
(0.05) (0.10) (0.09)
Share of VA produced in construction sector −0.12 0.13** −0.32**
(0.13) (0.05) (0.15)
Constant 0.23 0.74** 0.52
(0.14) (0.30) (0.45)
Year dummies Yes Yes Yes
Adjusted R-squared 0.058 0.020 0.091
Number of observations 220 220 220

Notes: First-difference model estimates. Independent variables are 5-year lagged. In parentheses standard errors clustered by region.
*
p-Value <0.100.
**
p-Value <0.050.
***
p-Value <0.010.

of industrial patenting as measured by NPL citations (column 3, innovation process. Universities can serve as knowledge sources
Table 4). when industry underinvests in private R&D.20
Interestingly, while private R&D tends to increase the quan-
tity and the quality of produced industrial patents, it is negatively
related to the degree to which industrial inventors rely on scientific
publications. One interpretation of the negative effect is that pri- 20
Again this must be treated cautiously since many citations are entered in a patent
vate R&D and local academic research can serve as substitutes in the not by the inventors but by examiners.
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800 797

Table 5
The effect of the university expansion on the number of regional industrial patents.

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Geographic location Value added per capita R&D stock Graduates in the Industrial
labor force VA/agricultural VA

Center and South North Low High Low High Low High Low High

Log Schools 0.90*** −0.05 1.01*** −0.06 0.79** 0.45 1.04* 0.77** 0.57** 0.86
(0.13) (0.36) (0.29) (0.18) (0.32) (0.35) (0.57) (0.28) (0.25) (0.63)
Number of observations 88 132 110 110 110 110 110 110 110 110

Notes: First-difference model estimates. Regional characteristics and year dummies are included in all regressions. Independent variables are 5-year lagged. In parentheses
standard errors clustered by region. Regions with high level of VA per capita (abbreviations are the same as in Table 1, in parentheses – the year when a region first reaches
the median): ABR (1997), EMR (1991), FVG (1994), LAZ (1991), LIG (1995), LOM, MAR (1995), MOL (2000), PIE (1991), TAA, TUS (1993), UMB (1995), VEN (1995), AOS (1989).
Regions with high level of private R&D: ABR (1992), CAM, EMR, FVG (1990), LAZ, LIG, LOM, PIE, SIC (1998), TUS, VEN. Regions with high ratio of industrial VA to agricultural
VA: ABR (2000), EMR (1989), FVG (1988), LAZ (1986), LIG (1986), LOM, MAR (1991), PIE, TUS, UMB (1988), VEN, AOS.
*
p-Value <0.100.
**
p-Value <0.050.
***
p-Value <0.010.

Regional heterogeneity. A natural question is whether these
effects hold uniformly across regions, or whether regions with dif-
ferent economic development respond differently. In Table 5 we
explore whether university spillovers differ by the type of region.
The results suggest that the strongest spillover effect occurs in
the center and in the south of Italy (columns 1 and 2). As we have
mentioned before, southern and central regions differ from the
northern regions in the level of income, private R&D investment
and industrial structure. To test whether these characteristics of the
economy are in fact conditioning the strength of the spillover effect,
we analyze how the effect differs across regions with different load-
ings along these dimensions. Specifically, for each dimension, we
split the regions according to the median values of each variable.
Note that regions can move from one group to another across time.
We observe that regions with low per capita income benefit
from knowledge spillovers from universities, whereas, on average,
no positive university effect could be observed for high income
regions (columns 3 and 4). Regions that have relatively low levels of
R&D and those with a less educated labor force benefit more from
universities (column 5–8). In less industrialized regions universi-
ties have a significant effect on innovation. In more industrialized
regions the effect of universities is potentially larger, but is very
noisy and not statistically significant (columns 9 and 10).21
To summarize, we have observed that an increase in the num-
ber of schools is followed by an increase in industrial innovation
activity in the region: the number of industrial patents increases.
The effect of new schools depends on the economic characteristics
of the region: poorer regions with relatively low human capital and
low investment in R&D benefit most from university presence. The
average characteristics of industrial patents seem not to change
with university presence, at least in the very short run. This sug-
gests that in the short run the new industrial patents induced by
the creation of new schools are on average not different from the
rest of industrial patents.
4.3. Type of knowledge transfer
In the previous section we found that at the regional level, uni-
versity presence has a positive influence on the quantity of indus-
trial innovation. Recall that in our analysis we define industrial
innovation as innovation done without academic inventors. There-
fore the observed increase in industrial patenting after new school
creation captures a spillover effect of university on industrial sector.
In this section we ask whether it is possible to identify the type
of university expertise that generates this spillover effect on indus-
try. Specifically, we are interested in understanding whether firms
are benefiting from university capability to produce frontier scien-
tific research, from a more applied inventive potential of academic
researchers or from other types of human capital or endowments.
Understanding the type of expertise that is effectively transferred
from university to local industry may be important for the design
of university incentive structures.
University capability to produce frontier scientific research
can be measured by the current publication records of profes-
sors employed in a university. A quality-adjusted measure would
weight the importance of each publication by its impact in terms
of received citations. This is a common way to characterize the
quality of academic researchers and there seems to be a trend now
towards making evaluation and incentives for researchers formally
related to their (quality-adjusted) publication records. We define
the quality weighted measure of scientific publications as the total
citations received between date of publication and 2009. Recently,
in addition, there has been an emphasis on academic patenting:
in a variety of ways academic researchers have been encouraged
to patent their findings, possibly in collaboration with firms. Pro-
fessors’ patents (and the number of citations received by these
patents) is our measure of academics’ inventive potential. These are
both topical measures, since today publications and especially aca-
demic patents are often used to measure university contribution
to economic activity. In this section we ask to what extent these
measures of academic research activity can explain the effects we
have found in the previous section.
We undertake the following accounting exercise. To the pre-
vious model, we add variables representing our measures of
professors’ expertise, and ask how their inclusion affects the esti-
mated coefficient of the number of schools. Specifically we include
in model (1) publications and academic patents as well as their
citations, Puni
i,t :
Pi,t = ˛ + ˇUi,t + Xi,t ␥ + Puni
i,t ␦ + ct + ci + i,t (2)

Note that scientific articles and academic patents might take up

21
The number of new schools is not sufficiently large to perform detailed hetero-
geneity analysis of the effect of different types of schools. However, according to
our data, the strongest effects were generated by schools in medicine, chemistry
and pharmacy, veterinary, and agriculture. Science and engineering schools have
stronger effects only in relatively more industrialized regions. Results are available
upon request.
to several years to be published or listed in EPO. Additionally, it
might take some time for schools to hire the necessary staff. So to
capture correctly the increase in the regional human capital due to
the opening of new university schools one would need to consider
the change in publications and academic patents over several years.
798 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800
Table 6
Explaining the effect of schools on industrial patents.
(1) (2)
Log Schools 0.68*** 0.70***
(0.21) (0.24)
Publications Yes
Publication citations
Academic patents
Academic patent citations
Adjusted R-squared 0.058 0.093
Number of observations 220 220
Notes: First-difference model estimates. Regional characteristics and year dummies are included in all regressions. Independent variables are 5-year lagged. In parentheses
standard errors clustered by region. All lags of publication and patent indicators are included. In parentheses standard errors clustered by region. The variance inflation factor
(VIF) of Log Schools in column 4 is 1.45.
*
p-Value <0.100.
**
p-Value <0.050.
***
p-Value <0.010.
Consequently, we allow the effect to be distributed in time and
include all lags of our measures in Punii,t .
A positive ˇ in Eq. (1) signals the existence of a causal relation-
ship between the opening of a new school and regional innovation
output. However, if the inclusion of Puni i,t in Eq. (2) reduces
significantly the size of ˇ relative to its value in Eq. (1), we can
claim that the corresponding university research output proxies at
least one type of human capital which is effectively translated into
regional innovation. If, controlling for professors’ publications and
academic patents, we still observe a significant residual effect of
universities on industrial patenting, we might conclude that there
is something beyond the academic human capital captured by
publications and academic patents that generates positive effects
on industrial innovation.
Note that university publications and academic patents are
potentially endogenous to industrial patenting. An active indus-
trial R&D sector could generate spillover effects inducing university
activity, perhaps directly as industry seeks partners, or through
some less direct, spillover mechanism. On the other hand, for var-
ious cost efficiency reasons, firms might engage in collaboration
with university crowding out their independent research. There-
fore we do not interpret the estimated direct effects of publications
and academic patents here.
The results are presented in Table 6. The first, very clear observa-
tion is that academic patenting (columns 5, 6, and 7) captures none
of the effects of university presence on industrial innovation. Exper-
tise in applied knowledge generation inside a university seems to
have little effect on local industrial innovativeness. Second, exper-
tise measured by a simple count of publications (column 2) also
seems completely ineffective. However, if we include quality in the
measure of expertise (column 3) the coefficient on Log Schools falls
by roughly 30 percent. Including both quantity and quality (column
4) reduces the coefficient by about 40 percent, and it becomes sta-
tistically insignificant. This suggests that what matters from the
point of view of industrial innovation is to have a local univer-
sity producing a significant amount of high-quality research. Strict
interpretation of statistical significance would imply that high qual-
ity research is all that matters, however the size of the coefficient
and its high standard error suggests some caution, and opens the
door to the possibility that there is something more, not captured
by standard measures of university output.
5. Conclusions
In this paper we focus on the economic effects of universi-
ties, and in particular on their effects on innovation. It is widely
believed that the presence of a university in a region is benefi-
cial for industrial innovation activity. We have taken advantage
of certain unusual features of university expansion in Italy dur-
(3) (4) (5) (6) (7)
0.48** 0.41 0.69*** 0.70*** 0.70***
(0.19) (0.29) (0.24) (0.23) (0.24)
Yes
Yes Yes
Yes Yes
Yes Yes
0.075 0.104 0.050 0.038 0.027
220 220 220 220 220
ing the 1980s and 1990s in an attempt to identify the effect of
university presence on regional innovation. According to ex post
evaluation of the expansion programmes, university schools were
created “like rain”, independently of underlying economic features
of the regions. This experiment permits a nice way out of standard
endogeneity problems.
Our first result indicates that there is indeed a significant effect
of the creation of new university schools on regional innovation
activity. Industrial patenting activity in the region increases quite
significantly even within five years of a new school opening. Thus
the general impression seems to be correct: university activity is
positively correlated with local innovation activity, and a policy
tool to increase the latter is indeed to increase the former.
The effect of new schools depends on the economic character-
istics of the area. Poor regions with low levels of R&D and human
capital investment are the ones that benefit most from an increase
in university presence. This suggests that one role of universities is
to fill gaps in missing R&D infrastructure. If this is the case, and if
there are positive feedbacks in innovation dynamics, then opening
a university in an innovation-poor region can be an effective part of
a development strategy for that region. Our results suggest that in
an initial period when the region is poorly endowed with “innova-
tion assets”, the university presence can compensate. This, under
the proviso that other necessary assets are present, could help to
push a region onto a higher innovation path.
How are these benefits created? Marshall might suggest that it
arises simply from the agglomeration of agents pursuing related
activities; Mike Lazaridis22 asserts that it arises through the pro-
duction of highly trained graduates; supporters of the Bayh-Dole
act assert that it comes from controlled technology transfer through
academic patenting. Given the time frame we examine, namely
effects within 5 years of a school opening, we exclude from the
analysis any effects of universities driven by the new graduates
who enter regional labor markets. To address the question of other
channels through which this influence flows, we have performed an
accounting exercise estimating how the gross effect of increasing
the number of universities is affected when we add to the model
proxies of factors that might be intermediary in the process. The
factors that we focus on include professors’ ability to produce scien-
tific research and their ability to produce patentable inventions. We
measure the former by the number of ISI publications and the latter
by the number of patent applications done with the participation
of academic inventors.
We observe that the human capital associated with traditional
university production, as measured by scientific publications and
their citations, has a strong effect on innovation, whereas academic
22
Founder and former CEO of Research in Motion, maker of the Blackberry.
 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800 799

patents cannot explain observed university effects. At the same
time, we do not exclude the possibility that other types of aca-
demic human capital, apart from the ability to produce frontier
research, could be relevant as well. Such competences as collecting,
generalizing and classifying existent knowledge might be relevant
for industrial inventors.
Universities perform many activities, and contain many vari-
eties of skill and knowledge. Almost certainly it is a mixture of skills
and knowledge that serves the interests of the local economy. How-
ever, the results presented in this paper suggest that it is possible
to tilt the skill set in directions that are not in fact useful. They sug-
gest that forcing universities to change tack towards more applied
research may not, in fact, provide for the needs of local industry.
At the very least, introducing patenting activity as a new measure
of university performance may not capture what matters, and, in
the face of Goodheart’s law, as a policy tool to make universities
more relevant to industry may be self-defeating. The traditional
tool that values high-quality scientific research may remain more
to the point.
Acknowledgements
We would like to acknowledge the inputs of members of the
KEINS project, and particularly Francesco Lissoni and Bulat Sandi-
tov, for their gracious openness and valuable help with the data. We
are also grateful to Francesco Quatraro who provided us with the
historic data on Italian regional R&D collected from various issues
of ISTAT. We also acknowledge the helpful comments of Bronwyn
Hall, Jacques Mairesse, Joel Baum and all the participants of XXXII
Symposium of Economic Analysis in Granada and DIME Confer-
ence “Knowledge Based Entrepreneurship: Innovation, Networks,
and System” in Milan. This research was supported by the DYREC
Chaire d’ Excellence of Robin Cowan, funded by the French ANR,
and grants from ESF COST and APE-INV projects.
Appendix A. Robustness and specification checks
A.1. Measurement of patent characteristics
In our dataset we observe information on patents only until
2004. There exist several ways to tackle the truncation problem
in citations for recent patents. Our preferred method is to extrapo-
late citations using the method proposed by Jaffe and Trajtenberg
(1996). Alternatively, one can impose the same truncation bias on
all observations and count only those citations that were received
within a certain time window after patent filing. Another alter-
native would be to normalize citations for patents submitted in
the same year. In order to account for different propensities to cite
across fields of science and technology, one could also normalize
citations within the same field.
Table A.1 summarizes estimations for (i) extrapolated patent
citations, (ii) patent citations received within 5 years after publi-
cation, and (iii) patent citations normalized by the year of patent
publication and patent class group. None of these definitions
reveals any effect of new schools on patent quality.
Given that potentially there might be differences across patent
classes in the propensity to refer to scientific literature, we also redo
estimations for non-patent literature citations normalizing them
for patents within the same type of patent class and year. Once
again, we do not observe any significant effect of new schools on
the propensity to refer to scientific literature.
A.2. Time clustering of new schools’ opening
In the paper we hypothesize that the short time span (5-years)
considered after the opening of new schools allows us to exclude
the knowledge transfers occurring through graduates. Still, if there
exists time clustering in the opening of new schools within a region,
this might affect the interpretation of our results. To avoid this

Table A.1
Measurement of patent characteristics.

Extrapolated citations 5-Year window after publication Normalized for patents of the
same year and patent class

a) Citations per patent

Log Schools −0.11 −0.16 −0.09
(0.32) (0.26) (0.17)
R-squared 0.109 0.147 0.107
Number of observations 220 220 220

Absolute number Normalized for patents of the

same year and patent class

b) NPL citations per patent

Log Schools −0.27 −0.10
(0.41) (0.23)
R-squared 0.174 0.216
Number of observations 220 220

Notes: First-difference model estimates. Regional characteristics and year dummies are included in all regressions. Independent variables are 5-year lagged. In parentheses
standard errors clustered by region. *p-Value <0.100, **p-Value <0.050, ***p-Value <0.010.

Table A.2
Time clustering of new schools’ opening.

All observations No openings for at least 3 years Rest of observations Excluding Lombardy, Lazio and
before considered period Emilia Romagna

Log Schools 0.68*** 1.13*** 0.80 0.65***

(0.21) (0.44) (0.59) (0.21)
R-squared 0.144 0.229 0.272 0.148
Number of observations 220 94 126 187

Notes: First-difference model estimates. Regional characteristics and year dummies are included in all regressions. Independent variables are 5-year lagged. In parentheses
standard errors clustered by region. *p-Value <0.100, **p-Value <0.050.
***
p-Value <0.010.
800 R. Cowan, N. Zinovyeva / Research Policy 42 (2013) 788–800

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