International Inequalities in The Local Economic Impact of Universities: The Case of Hungary and France

Nowadays the realization that certain economic units, universities or other objects have impact on the economy of their region comes more and more into prominence. A growing demand appears to generate more precise studies regarding the quantification of economic impact of these entities. The topic of the examination of economic impact is especially interesting and exciting when we can compare regions with different level of development, but with the presence of an internationally successful university. The local economic impact of a large tertiary education institution such as a university is an issue which has attracted considerable attention in literature. Different methods used in literature make results hardly comparable, we use the same method to investigate universities in different countries: in the lack of regional input-output matrices a multiplier based approach for first and second missions (education and research), while an application of Jongbloed?s indicator set for third mission. Generally, there are four substantial problems. First, the definition of impact, second, measuring and estimating first-round expenditures and avoiding double-counting, third, estimating the correct value of the multiplier, fourth, the quantification of the third mission activities. The economic impact study has become a standard tool used by Western universities to persuade state legislatures of the importance of expenditures on higher education. As economic impact studies become a political tool in the review of education, conservative assumptions and methods should be used to promote objectivity in the research process. The goal of our study is to unravel the effects and impact of the University of Szeged (Hungary) and the University of Lorraine (France) regarding their local economy. The topic is quite unique, as the NUTS2 regions in which the examined universities are located in a lagging behind region compared to national average, but per capita GDP is 3.6 higher in Lorraine. On the other hand these universities have the institutional ranking around the 500th place as published on the Academic Ranking of World Universities and employers of about 7000 employees. The socio-economic welfare of the region supposedly depends on the university in Hungary, nevertheless the same amplitude in France. The goal of the study is to attempt the quantification of this presumption. As our results show, the impact per student is in the same magnitude in both countries, however third mission is much more implemented in France. The reasons of this difference can be found in historical facts and in different level of economic development.