Well, they do in many respects or at least, if they did I could come with serveral reasons. Possibly smarter colleagues to collaborat with? check. A large pool of bright students to supervise? check. Better facilities and resources? check. Better chances of getting papers published and grants funded because of your institution? check.
Still, the research mentioned by The Economist this week, says that, at least if you are a physicist, that might not be true. Albert-Laszlo Barabasi and colleagues followed several physicists as they moved from lower-ranking to high ranking universities and vice versa. Turns out that the impact of their research was almost unaffected by those changes. I must admit that I do not know why. Maybe physicists are different than biologists. Or maybe talent tends to concentrate a lot less than money?