In this study, the term ‘World-Class Universities per capita’ or ‘WCUs per capita’ is created and defined as the number of world-class universities available in a country divided by its population. To date, it is known that global university rankings are solely the numerical measures of world-class universities. ARWU is chosen as the benchmark of wold-class universities (WCUs) among the university ranking methodologies available based on the assumption that universities listed under Top 500 are WCUs. Simple regression analysis is carried out to determine the correlation between WCUs per capita and GDP per capita as well as GDP growth. The results show that WCUs per capita is strongly correlated to the nation’s GDP per capita. However, the WCUs per capita has an insignificant effect on GDP growth. There is a pronounced increase in significance level when the ranking lists are expanded from the Top 100 to Top 500. This suggests that it is crucial for a nation to increase the number of WCUs (listed in the Top 500) in order to attain a higher GDP per capita, rather than having a few elite WCUs in the Top 100. In addition, ‘freedom from corruption’ is the most significant institutional factor when institutional factors are added into the regression model, followed by ‘property rights’, ‘business freedom’ and ‘investment freedom’.

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