Regional innovation effects of applied research institutions

We analyze the effect of applied research institutions on regional innovation activity. Exploiting a policy reform that created tertiary education institutions conducting applied research, the Universities of Applied Sciences (UASs) in Switzerland, we apply difference-in-differences estimations to investigate their effect on innovation quantity and quality. Findings show a 6.8% increase in regional patenting activity (i.e., quantity), and an increase of patent quality of up to 9.7% (measured by patent family size, and the number of claims, and citations per patent). Findings are robust to various model specifications, suggesting that applied research taught in UASs boosts regional innovation.