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Strategic investment of public funds: State responses to federal R&D grants

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  • Suryo Prabowo, Aichiro
  • Spreen, Thomas Luke

Abstract

This paper assesses the impact of federal grants for research and development (R&D) on state R&D investment in the United States. We find that federal grants for academic R&D do not significantly influence state allocations to academic institutions from 2006 to 2021. By contrast, R&D performed by agencies of the state government is estimated to grow by $0.35 with each additional dollar of federal support. We argue that these divergent results reflect the localized nature of benefits generated from R&D performed by state government agencies compared to university-based research. A computational text analysis of recent federal R&D awards to academic institutions and state agencies corroborates this hypothesis.

Suggested Citation

  • Suryo Prabowo, Aichiro & Spreen, Thomas Luke, 2026. "Strategic investment of public funds: State responses to federal R&D grants," Journal of Public Policy, Cambridge University Press, vol. 46(1), pages 126-145, March.
    • Handle: RePEc:cup:jnlpup:v:46:y:2026:i:1:p:126-145_6
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