Expenditure impacts of higher education institutions and their spatial distribution : Glasgow city region v the rest of Scotland

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Hermannsson, Kristinn (2013) Expenditure impacts of higher education institutions and their spatial distribution : Glasgow city region v the rest of Scotland. Fraser of Allander Economic Commentary, 37 (1). pp. 74-81. ISSN 2046-5378

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Abstract

Several previous studies have established that higher education is a significant sector in the Scottish economy. The most recent of these find the expenditure of Higher Education Institutions (HEIs) and their staf support approximately 4% of gross output in Scotland, based on conventional multiplier based impact attribution. If the role of Scottish Government funding is discounted (due to the binding budget constraint imposed by the Barnett funding mechanism) this is still a sizeable 2%; indicating that higher education is a significant export sector (for details see: Hermannsson et al 2013ab). It has long been recognised that higher education as a sector is even more important for the local economies where the HEIs are concentrated. For example, in a 1966 issue of the Scottish Journal of Political Economy Blake and McDowell settle the argument, which is more important for the economy of St Andrews, the university or the golf course. This article analyses the role of higher education in the economy of Glasgow (GLA) and the rest of the Strathclyde regions (RST). The aim is to compare and contrast the impact of the west coast institutions to the impacts of HEIs in the rest of Scotland (ROS). In particular the aim is to examine the degree to which the spatial distribution of HE activities between the West and the ROS is determined by Scottish Government funding decisions and to what extent this is driven by success at securing external students and funding.

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