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The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Welsh Economy: Homogeneity or Heterogeneity?

Author

Listed:
  • Kristinn Hermannsson

    (Fraser of Allander Institute, Strathclyde University)

  • Katerina Lisenkova

    (Fraser of Allander Institute, Strathclyde University)

  • Peter McGregor

    (Fraser of Allander Institute, Strathclyde University)

  • Kim Swales

    (Department of Economics, University of Strathclyde)

Abstract
This paper replicates the analysis of Scottish HEIs in Hermannsson et al (2010a) for the case of Wales in order to provide a self-contained analysis that is readily accessible by those whose primary concern is with the regional impacts of Welsh HEIs. When we treat each of the twelve Higher Education Institutions (HEIs) that existed in Wales in 2006 as separate sectors in conventional input-output analysis, their expenditure impacts per unit of final demand appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of their income by source reveals considerable variation in their dependence upon funding from the devolved Welsh Assembly Government and their ability to draw in income/funding from external sources. Acknowledging the binding budget constraint of the Welsh Assembly Government and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact of HEIs upon the Welsh economy,with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts, identifying the amount of exogenous spending per student, modifies the heterogeneity of the overall expenditure impacts. On balance this suggests that the impacts of impending budget cut-backs will be quite different by institution depending on their sensitivity to public funding. However, predicting the outcome of budget cutbacks at the margin is problematic for reasons that we identify.

Suggested Citation

  • Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Welsh Economy: Homogeneity or Heterogeneity?," Working Papers 1027, University of Strathclyde Business School, Department of Economics.
    • Handle: RePEc:str:wpaper:1027
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    References listed on IDEAS

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    1. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G & Swales, J Kim, 2010. "The Expenditure Impacts of London-based Individual Higher Education Institutions (HEIs) and their Students on the Economy of England: Homogeneity or Heterogeneity?," SIRE Discussion Papers 2010-106, Scottish Institute for Research in Economics (SIRE).
    2. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "“Policy Scepticism†and the Impact of Welsh Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," Working Papers 1022, University of Strathclyde Business School, Department of Economics.
    3. Christopher Blake & Stuart McDowall, 1967. "A Local Input-Output Table," Scottish Journal of Political Economy, Scottish Economic Society, vol. 14(3), pages 227-242, November.
    4. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "An HEI-Disaggregated Input-Output Table for Wales," Working Papers 1021, University of Strathclyde Business School, Department of Economics.
    5. Learmonth, D. & McGregor, P.G. & Swales, J.K. & Turner, K.R. & Yin, Y.P., 2007. "The importance of the regional/local dimension of sustainable development: An illustrative Computable General Equilibrium analysis of the Jersey economy," Economic Modelling, Elsevier, vol. 24(1), pages 15-41, January.
    6. Alex Christie & J. Kim Swales, 2010. "The Barnett Allocation Mechanism: Formula Plus Influence?," Regional Studies, Taylor & Francis Journals, vol. 44(6), pages 761-775.
    7. Hermannsson, Kristinn & Lisenkova, Katerina & Lecca, Patrizio & McGregor, Peter G & Swales, J Kim, 2010. "The Importance of Graduates for the Scottish Economy: A Micro-to-Macro Approach," SIRE Discussion Papers 2010-80, Scottish Institute for Research in Economics (SIRE).
    8. Grant Allan & Peter Mcgregor & Kim Swales, 2011. "The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach," Regional Studies, Taylor & Francis Journals, vol. 45(9), pages 1171-1186, March.
    9. Harminder Battu & John Finch, 1998. "Integrating knowledge effects into university impact studies. A case study of Aberdeen University," Working Papers 98-08, Department of Economics, University of Aberdeen.
    10. Richard Harris & Qian Cher Li & John Moffat, 2013. "The Impact Of Higher Education Institution–Firm Knowledge Links On Establishment-Level Productivity In British Regions," Manchester School, University of Manchester, vol. 81(2), pages 143-162, March.
    11. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Scottish Economy under Devolution: Homogeneity or Heterogeneity?," Working Papers 1016, University of Strathclyde Business School, Department of Economics.
    12. Scott Loveridge, 2004. "A Typology and Assessment of Multi-sector Regional Economic Impact Models," Regional Studies, Taylor & Francis Journals, vol. 38(3), pages 305-317.
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    Cited by:

    1. Kristinn Hermannsson & Katerina Lisenkova & Patrizio Lecca & Peter McGregor & Kim Swales, 2010. "The Importance of Graduates for the Scottish Economy: A "Micro-to-Macro" Approach," Working Papers 1026, University of Strathclyde Business School, Department of Economics.
    2. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "An HEI-Disaggregated Input-Output Table for Wales," Working Papers 1021, University of Strathclyde Business School, Department of Economics.
    3. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of London-based Higher Education Institutions (HEIs) on the economy of England: Accounting for Alternative Uses of Public Expenditure," SIRE Discussion Papers 2010-97, Scottish Institute for Research in Economics (SIRE).
    4. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of Northern Irish Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," SIRE Discussion Papers 2010-78, Scottish Institute for Research in Economics (SIRE).
    5. Lisenkova, Katerina & McGregor, Peter G. & Swales, J. Kim, 2010. "Policy Scepticism and the Impact of Welsh Higher Education Institutions (HEIs) on their Host Region: Accounting for Regional Budget Constraints," SIRE Discussion Papers 2010-72, Scottish Institute for Research in Economics (SIRE).

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    More about this item

    Keywords

    Higher Education Institutions; Input-Output; Wales; Impact study; Multipliers; Devolution.;
    All these keywords.

    JEL classification:

    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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