ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Sunday, May 28, 2006

It's the Internet Thing

Aaa_56 Does working at an elite university improve your research and publications?  Do the resources those institutions offer make a difference in the quality of the scholarship produced?

According to three business/finance scholars, Michigan's E. Han Kim and Adair Morse and Chicago/Harvard's Luigi Zingales (left), in Are Elite Universities Losing Their Competitive Edge?, the answer is "no."  There was a strong positive effect, they find, back in the 1970s, but that edge vanished during the 1990s.  Today, they find, there's no particular benefit to being at an elite institution.  They do find that some attributes that some (but not all) elite institutions enjoy, like high salaries, pleasant working conditions, supportive colleagues, do positively affect research -- but note that many up-and-coming institutions can replicate those advantages, even if they can't replicate the reputation (yet).  One odd finding is that being closely surrounded by extremely productive colleagues tends to make one less productive than if one is working at a distance.

This news is (if true) good for scholars and bad news for universities, which will find it harder to lure faculty based on reputation alone.  Here's 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.

[Frank Snyder]

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