Research Grants, Sources of Ideas and the Effects on Academic Research

The academic and policy debate on the role and the consequences of university–industry interactions has led a substantial body of empirical studies on numerous forms of interactions that occur between academe and industry. University research has been found to positively affect industrial innovations for instance by expanding the pool of ideas from which private sector firms draw when searching for solutions and for new technological challenges. Fewer studies, however, have taken the perspective that academic research may actively source ideas from industry shaping research agendas. Close interactions, for instance in the form of joint research, contract research and consulting, are likely to have a lasting impact on both parties involved.

This study aims to fill this gap in the literature using data from different data sources among which a survey of university science and engineering departments in Germany to study the relationship between research funding, sources of ideas and research productivity. Recent studies argued for a direct relationship between research grants and research outcome, but left the ways in which academic research is affected unexplored (e.g. Blumenthal et al. 1996; Geuna 1997; Manjarrés-Henríquez et al. 2008; Hottenrott and Thorwarth 2011; Banal-Estanol et al. 2012; Lawson 2012). In the following analysis we therefore investigate if and how research funding, in particular project based “third-party funding” relates to the channels through which university researchers source ideas. We distinguish between traditional scientific sources, institutional and industrial sources. Furthermore, we study the influence of different sources of ideas on research productivity in terms of publications in scientific journals and patents.

The results show that research funding is indeed associated with sourcing of ideas that impacts research agendas by providing impulses for academic research. Estimating simultaneous equation models, we find that the higher the share of the departments’ funding from industry, the higher the likelihood that departments source ideas from industrial partners, especially from large firms. Second, taking into account unobserved heterogeneity we estimate count data Poisson models that show that these different sources impact research productivity. In particular, departments sourcing ideas from large firms show lower publication rates as well as fewer citations per publication in the seven years following the survey. We do not find such a negative effect on publications from ideas sourced from small and medium-sized firms (SMEs). Contrarily, we even observe a positive effect on the number of patents on which the professor was listed as inventor if ideas were sourced from SMEs while impulses from large firms result in fewer patents.

Hottenrott, Hanna and Cornelia Lawson (2012), Research Grants, Sources of Ideas and the Effects on Academic Research, ZEW Discussion Paper No. 12-048, Mannheim.