The Effects of Universities on Local Retail, Service, and F.I.R.E. Employment: Some Cross‐Sectional Evidence

This article examines the question of whether the traditional view of a complementary relationship between universities and local businesses is still appropriate or whether auxiliary activities and other competitive elements have changed this relationship. Cross‐sectional data on over 3100 counties and 3300 institutions are used to analyze the effects of university enrollment and auxiliary activities on county‐level employment in the retail, financial, and service sectors. Findings indicate that the negative effects of university auxiliary activities are confined to relatively small counties, are small in magnitude, and are more than offset by the positive effects of spending by universities and students. The overall impact is positive, is more pronounced in more populous counties, and has increased over time.