NCPA - National Center for Policy Analysis


December 15, 2006

For centuries, physical access to other researchers has facilitated all forms of knowledge-based production.  Universities occupy physical campuses, and residence at an elite university in close proximity to other scholars has long been thought to increase research productivity, says Linda Gorman (National Bureau of Economic Research).

Nonetheless, the future may be different according to researchers E. Han Kim, Adair Morse and Luigi Zingales.  They conclude that advances in information technology over the last three decades have greatly diminished the importance of physical proximity.  As a result, academics now are less attracted to universities with highly productive faculty members. 

  • In general, the measures used in the study suggest that although professorial research productivity declines with age and experience, a faculty member who moved to Harvard from a school not on the top-25 list in the 1970s could expect to almost double his research productivity.
  • At the time, research productivity would have increased by moving to any of 17 of the schools on the top-25 list of economics departments.
  • By the 1990s, the effect of moving to a top economics department had declined; only two schools out of the 25 were likely to increase an individual's productivity.

While knowledge spillovers have declined, cultural norms still seem to matter.  The authors conclude that the "bad influence of non-productive colleagues seems to extend well beyond the opportunity cost of positions occupied by unproductive employees."

The researchers also reason that the benefits of physical proximity may have allowed the best schools to offer somewhat lower salaries.  Upcoming universities now compete on a more level playing field to attract productive faculty.

Source: Linda Gorman, "Are Elite Universities Losing Their Competitive Edge," NBER Digest, December 2006; based upon: E. Han Kim, Adair Morse and Luigi Zingales, "Are Elite Universities Losing Their Competitive Edge?" National Bureau of Economic Research, May 2006.

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