Higher Education Expansion and the Pattern of Regional Specialization: Evidence From China

This is the authors' abstract. We don't add key points for this paper.

This paper investigates how the expansion of higher education influences regional patterns of regional specialization. Exploiting a natural experiment arising from the large‐scale college expansion in China, we apply a triple‐difference (DDD) approach to identify the causal impact. Our findings reveal that industries with greater demands for human capital tend to account for a larger output share in cities that experienced more significant college expansion. This effect is primarily driven by the growth of existing firms, rather than the entry or exit of firms. Sub‐group analyses further indicate that firms with educated and skilled workforces, and those investing in staff training and R&D, were more affected. Strong evidence highlights labor productivity improvements and R&D‐driven TFP gains as key mechanisms, with no support for the technology adoption channel.