Do research universities boost regional economic development? -- Evidence from China

Using a research university’s relocation in 1970 as an exogenous shock, we investigate whether research universities are important for regional economic development in China. We analyze the development in the treated regions compared with a set of control regions that are created using the synthetic control method. We find the research university does not facilitate local economic development in the short run. More importantly, in the long run, the impact of a research university on the development of the local economy may even turn negative. Placebo test is conducted to show the robustness of our results.