Private University Campuses Strengthen Local Economies – Especially in Non-Urban Regions

Regional economic development remains a key policy challenge in Germany. In this context, universities are often seen as pos sible drivers of local development. However, empirical evidence for the role private university campuses play in local economies has so far been limited. New evidence for Germany demonstrates that private university campuses can increase local economic activity. The estimated effect corresponds to growth in local gross domestic product of around 1.5 to 2.1 percent. At the same time, the effects are not uniform across regions. They are particularly pronounced in intermediate and more rural regions, while the evidence for more urban regions is limited. The effects also build up gradually over time and become statistically significant only after more than ten years. In addition, there is no evidence of measurable spillovers to neighbouring regions. Taken to gether, the results suggest that private university campuses can contribute to regional development, especially outside the most urban parts of the country and over longer time horizons.

Krieger, Bastian, Henning Kroll, Torben Schubert and Linus Strecke (2026), Private University Campuses Strengthen Local Economies – Especially in Non-Urban Regions, ZEW policy brief No. 26-07, Mannheim