TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, May 26, 2006

Are Elite Universities Losing Their Competitive Edge?


E. Han Kim (University of Michigan, Ross School of Business), Adair Morse (University of Michigan, Ross School of Business) & Luigi Zingales (University of Chicago & Harvard University) have posted Are Elite Universities Losing Their Competitive Edge? on SSRN.  Here is the abstract:

We study the location-specific component in research productivity of economics and finance faculty who have ever been affiliated with the top 25 universities in the last three decades. We find that there was a positive effect of being affiliated with an elite university in the 1970s; this effect weakened in the 1980s and disappeared in the 1990s.

We decompose this university fixed effect and find that its decline is due to the reduced importance of physical access to productive research colleagues. We also find that salaries increased the most where the estimated externality dropped the most, consistent with the hypothesis that the de-localization of this externality makes it more difficult for universities to appropriate any rent. Our results shed some light on the potential effects of the internet revolution on knowledge-based industries.

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It certainly hasn't caused them to let up on tuition increases.

Posted by: Robert Schwartz | May 26, 2006 7:11:32 PM