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This paper analyses the impact of London-based higher education institutions (HEIs) on the English economy. When we treat each of the HEIs as separate sectors in conventional input-output analysis, their expenditure impacts appear rather homogenous, with the apparent heterogeneity of their overall impacts being primarily driven by scale. However, a disaggregation of income by source reveals considerable variation in their dependence upon public funding and ability to draw in income/funding from external sources. Acknowledging the possible alternative uses of the public funding and deriving balanced expenditure multipliers reveals large differences in the net-expenditure impact with the source of variation being the origin of income. The institutional multiplier is driven by the ability to attract external funding, which would typically favour research-intensive institutions. However, the impacts of students’ consumption expenditures are also significant. In terms of ranking of multipliers the overall results are mixed. [ABSTRACT FROM PUBLISHER]

Comparing each of the higher education institutions (HEIs) as a separate sector in the Scottish input-output table suggests that their expenditure patterns are homogenous and that any apparent heterogeneity in their conventional demand impacts depends primarily on scale. However, a disaggregation of their income by source reveals a disparity in their degree of dependence upon funding from the devolved Scottish Government. Acknowledging the binding budget constraint of the Scottish Government, and deriving balanced-expenditure multipliers, reveals large differences in the net-expenditure impact of HEIs upon the Scottish economy, with the source of variation being the origin of income. Applying a novel treatment of student expenditure impacts through identifying the amount of exogenous spending per student further increases the heterogeneity of the overall expenditure effects. These issues have particular importance for many governments facing increasing pressure to reduce their overall budgets. [ABSTRACT FROM AUTHOR]