Working Paper: NBER ID: w28160
Authors: Tania Babina; Alex Xi He; Sabrina T. Howell; Elisabeth Ruth Perlman; Joseph Staudt
Abstract: U.S. universities have experienced a shift in research funding away from federal and towards private industry sources. This paper evaluates whether the source of funding – federal or private industry – is relevant for commercialization of research outputs. We link person-level grant data from 22 universities to patent and career outcomes (including IRS W-2 records). To identify a causal effect, we exploit individual-level variation in exposure to narrow federal R&D programs stemming from pre-existing field specialization. We instrument for the researcher’s funding sources with aggregate supply shocks to federal funding within these narrow fields. The results show that a higher share of federal funding reduces patenting and the chances of joining an incumbent firm, while increasing the chances of high- tech entrepreneurship and of remaining employed in academia. A decline in the federal share of funding is offset by an increase in the private share of funding, which has opposite effects. We conclude that the incentives of private funders to appropriate research outputs have important implications for the trajectory of university researcher careers and intellectual property.
Keywords: Federal Funding; Private Funding; University Research; Commercialization; Patents; Entrepreneurship
JEL Codes: G18; G38; I20; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| federal funding (I28) | probability of patenting (O34) |
| federal funding (I28) | chances of joining an incumbent firm (L26) |
| federal funding (I28) | likelihood of high-tech entrepreneurship (O31) |
| federal funding (I28) | probability of remaining in academia (D29) |
| federal funding (I28) | probability of working for a firm that funded their research (M51) |
| private funding (I22) | commercialization outcomes (F61) |