Reputation and Competence in Publicly Funded Science: Estimating the Effects on Research Group Productivity

This paper estimates the "production function" for scientific research publications in the field of biotechnology. it utilises an exceptionally rich and comprehensive data set pertaining to the universe of research groups that applied to a 1989-1993 research programme in biotechnology and bio-instrumentation, sponsored by the ltalian National Research Council, CNR. A structural model of the resource allocation process in scientific research guides the selection of instruments in the econometric analysis, and controls for selectivity bias effects on estimates based on the performance of funded research units. The average elasticity of research output with respect to the research budget is estimated to be 0.6; but, for a small fraction of groups led by highly prestigious Pls this elasticity approaches 1. These estimates imply, conditional on the distribution of observed productivity, that a more unequal distribution of research funds would increase research output in the short-run. Past research publication performance is found to have an important effect on expected levels of grant funding, and hence on the unit's current productivity in terms of (quality adjusted) publications. The results show that the productivity of aggregate resource expenditures supporting scientific research is critically dependent on the institutional mechanisms and criteria employed in the allocation of such resources.