The expenditure impacts of London's higher education institutions : the role of diverse income sources

Hermannsson, Kristinn and Lisenkova, Katerina and McGregor, Peter and Swales, John (2015) The expenditure impacts of London's higher education institutions : the role of diverse income sources. Studies in Higher Education, 40 (9). pp. 1641-1659. ISSN 0307-5079

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Abstract

This paper analyses the impact of London-based higher education institutions (HEIs) on the English economy. When we treat each of the HEIs as separate sectors in conventional input-output analysis, their expenditure impacts appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of income by source reveals considerable variation in their dependence upon public funding and ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact with the source of variation being the origin of income. The institutional multiplier is driven by the ability to attract external funding, which would typically favour research-intensive institutions. However, the impacts of students’ consumption expenditures are also significant. In terms of ranking of multipliers the overall results are mixed.