An authoritative financial study has revealed the University of Birmingham contributes £1 billion to the region's economy.

According to research by Oxford Economics the institution, which has 28,000 students, also supports almost 12,000 jobs.

The report also revealed the higher education institution is worth more to the West Midlands economy than eight of the region’s top football clubs combined.

The value-added economic impact of the university in the 2011-12 academic year was almost double that of clubs including Aston Villa, Birmingham City, Walsall, West Bromwich Albion and Wolverhampton Wanderers.

In Birmingham alone, the university is responsible for one in every 50 jobs, and contributed £898 million to the city last year.

University vice chancellor Professor David Eastwood said: “It is clear that the University of Birmingham has a major economic impact on the region.

“The £1 billion figure demonstrates just how important higher education is to the development of the regional and national economy, even more so in the challenging financial environment.

“The University of Birmingham is a leading global university. It is one of a small number of large and truly global organisations in Birmingham and plays a significant part in attracting international visitors to the region. I am extremely proud of the massive economic, social and cultural contribution that the university makes.”

The report measured the economic impact of the university on the city of Birmingham and the West Midlands region during the 2011-12 academic year. It also showed nearly 28,000 students who were enrolled at the university last year spent around £257 million in the West Midlands on shopping, accommodation and transport.

And 40 per cent of graduates stayed on to work in Birmingham for at least six months after graduation. Many are working in top professions as lawyers, teachers and doctors.

Nearly 20 companies have been founded as a direct result of the university’s research, and the university also received £145.5 million in research funding – around 90 per cent of the city’s total research income of all Birmingham higher education institutions.

The report also revealed that university’s contribution to the local economy had increased by almost 40 per cent since the 2005/06 academic year.

This is due in part to projects including a £175 million investment in redeveloping the university’s Edgbaston campus.

Plans include new centres for teaching and research, a new sports centre – complete with Olympic-sized swimming pool – and re-developing the main library.

Prof Eastwood said another key reason for the university’s growth was down to it being “one of Birmingham’s global businesses” with links to China and North America.

“We take our economic role in the region very seriously,” he added.

“We have nearly 28,000 students and thousands of employees, and this confirms the scale of the operation. The university is a leading education provider both nationally and internationally and we are the major research institution in the city as well.

“We have continued to invest in people and facilities in that period, which has helped us to grow. We have grown internationally as well as in Birmingham, which has meant more international students and more international income.

“The university is continuing to develop our campus, as well as growing our international footprint in places like China, working on student recruitment and with businesses overseas.”