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Federal Life Sciences Funding and University R&D

Author

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  • Margaret E. Blume-Kohout
  • Krishna B. Kumar
  • Neeraj Sood

Abstract

This paper investigates the impact of federal extramural research funding on total expenditures for life sciences research and development (R&D) at U.S. universities, to determine whether federal R&D funding spurs funding from non-federal (private and state/local government) sources. We use a fixed effects instrumental variable approach to estimate the causal effect of federal funding on non-federal funding. Our results indicate that a dollar increase in federal funding leads to a $0.33 increase in non-federal funding at U.S. universities. Our evidence also suggests that successful applications for federal funding may be interpreted by non-federal funders as a signal of recipient quality: for example, non-PhD-granting universities, lower ranked universities and those that have historically received less funding experience greater increases in non-federal funding per federal dollar received.

Suggested Citation

  • Margaret E. Blume-Kohout & Krishna B. Kumar & Neeraj Sood, 2009. "Federal Life Sciences Funding and University R&D," NBER Working Papers 15146, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:15146
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    References listed on IDEAS

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    1. Arthur M. Diamond, 1999. "Does Federal Funding “Crowd In” Private Funding Of Science?," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 423-431, October.
    2. Payne A. Abigail & Siow Aloysius, 2003. "Does Federal Research Funding Increase University Research Output?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-24, May.
    3. Jacob, Brian A. & Lefgren, Lars, 2011. "The impact of research grant funding on scientific productivity," Journal of Public Economics, Elsevier, vol. 95(9), pages 1168-1177.
    4. David, Paul A. & Hall, Bronwyn H. & Toole, Andrew A., 2000. "Is public R&D a complement or substitute for private R&D? A review of the econometric evidence," Research Policy, Elsevier, vol. 29(4-5), pages 497-529, April.
    5. A. Payne, 2001. "Measuring the Effect of Federal Research Funding on Private Donations at Research Universities: Is Federal Research Funding More than a Substitute for Private Donations?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 8(5), pages 731-751, November.
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    Cited by:

    1. Raphaël Godefroy, 2010. "The birth of the congressional clinic," Working Papers halshs-00564921, HAL.
    2. Lauren Lanahan, 2016. "Multilevel public funding for small business innovation: a review of US state SBIR match programs," The Journal of Technology Transfer, Springer, vol. 41(2), pages 220-249, April.
    3. Joshua L Rosenbloom & Donna K Ginther & Ted Juhl & Joseph A Heppert, 2015. "The Effects of Research & Development Funding on Scientific Productivity: Academic Chemistry, 1990-2009," PLOS ONE, Public Library of Science, vol. 10(9), pages 1-23, September.
    4. Margaret Blume-Kohout & Krishna Kumar & Christopher Lau & Neeraj Sood, 2015. "The effect of federal research funding on formation of university-firm biopharmaceutical alliances," The Journal of Technology Transfer, Springer, vol. 40(5), pages 859-876, October.
    5. Elzbieta Pohulak-Zoledowska, 2013. "Property Rights Of Scientific Knowledge In Terms Of Creating Innovation," Oeconomia Copernicana, Institute of Economic Research, vol. 4(1), pages 37-52, March.
    6. Alexander Whalley & Justin Hicks, 2014. "Spending Wisely? How Resources Affect Knowledge Production In Universities," Economic Inquiry, Western Economic Association International, vol. 52(1), pages 35-55, January.
    7. Maryann Feldman & Lauren Lanahan, 2013. "State Science Policy Experiments," NBER Chapters, in: The Changing Frontier: Rethinking Science and Innovation Policy, pages 287-317, National Bureau of Economic Research, Inc.
    8. Daniel Crown & Alessandra Faggian, 2019. "Naturalization and the productivity of foreign-born doctorates," Journal of Geographical Systems, Springer, vol. 21(4), pages 533-556, December.
    9. Leila Tahmooresnejad & Catherine Beaudry & Andrea Schiffauerova, 2015. "The role of public funding in nanotechnology scientific production: Where Canada stands in comparison to the United States," Scientometrics, Springer;Akadémiai Kiadó, vol. 102(1), pages 753-787, January.
    10. Beaudry, Catherine & Allaoui, Sedki, 2012. "Impact of public and private research funding on scientific production: The case of nanotechnology," Research Policy, Elsevier, vol. 41(9), pages 1589-1606.
    11. Richard Jensen & Jerry Thursby & Marie C. Thursby, 2010. "University-Industry Spillovers, Government Funding, and Industrial Consulting," NBER Working Papers 15732, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I1 - Health, Education, and Welfare - - Health
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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