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Does government funding complement or substitute private research funding to universities?


  • Muscio, Alessandro
  • Quaglione, Davide
  • Vallanti, Giovanna


There is growing political pressure on universities to intensify their interaction with industry and to enlarge their own research funding options, in a context characterised by increasing constraints on public spending. However, whether the successful achievement of such a political desired outcome is consistent with a restriction of government funding is not clear and requires further investigation. As a matter of fact, there is scant empirical evidence on whether and to what extent government funding affects the external funding options available to universities, in particular those related to research and consulting activities. By using a set of probit and tobit panel data models estimated on financial data for the whole population of Italian university departments engaged in research in the Engineering and Physical Sciences, this paper provides evidence that government funding to universities complements funding from research contracts and consulting, contributing to increasing universities’ collaboration with industry and activating knowledge transfer processes.

Suggested Citation

  • Muscio, Alessandro & Quaglione, Davide & Vallanti, Giovanna, 2013. "Does government funding complement or substitute private research funding to universities?," Research Policy, Elsevier, vol. 42(1), pages 63-75.
  • Handle: RePEc:eee:respol:v:42:y:2013:i:1:p:63-75 DOI: 10.1016/j.respol.2012.04.010

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    References listed on IDEAS

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    Cited by:

    1. Paola Cardamone & Valeria Pupo & Fernanda Ricotta, 2014. "Assessing The Impact Of University Technology Transfer On Firms’ Innovation," Working Papers 201403, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    2. Beck, Mathias & Junge, Martin & Kaiser, Ulrich, 2017. "Public Funding and Corporate Innovation," IZA Discussion Papers 11196, Institute for the Study of Labor (IZA).
    3. Rossi, Federica & Fassio,Claudio & Geuna, Aldo, 2014. "The Role of Institutional Characteristics in Knowledge Transfer: A Comparative Analysis of Two Italian Universities," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201425, University of Turin.
    4. Muscio, Alessandro & Nardone, Gianluca, 2012. "The determinants of university–industry collaboration in food science in Italy," Food Policy, Elsevier, vol. 37(6), pages 710-718.
    5. Aiello, Francesco & Pupo, Valeria & Ricotta, Fernanda, 2013. "Firm heterogeneity in TFP, sectoral innovation and geography. Evidence from Italy," MPRA Paper 48573, University Library of Munich, Germany.
    6. Felix J. Lopez-Iturriaga & Emilio Lopez-Millan, 2015. "Institutional Framework, Corporate Ownership Structure, and R&D Investment: An International Analysis," HSE Working papers WP BRP 36/MAN/2015, National Research University Higher School of Economics.
    7. Muscio, Alessandro & Quaglione, Davide & Ramaciotti, Laura, 2016. "The effects of university rules on spinoff creation: The case of academia in Italy," Research Policy, Elsevier, vol. 45(7), pages 1386-1396.
    8. Ruslan Rakhmatullin & Louis Brennan, 2014. "Motivation Behind Researchers’ Participation in Formal Networking Research Projects Funded by the European Union," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(2), pages 305-329, June.
    9. repec:spr:scient:v:112:y:2017:i:1:d:10.1007_s11192-017-2402-2 is not listed on IDEAS
    10. Fernanda Morillo, 2016. "Public–private interactions reflected through the funding acknowledgements," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(3), pages 1193-1204, September.
    11. Shukhrat Kholmuminov & Shayzak Kholmuminov & Robert E Wright, 2017. "Resource dependence analysis of public higher education institutions in Uzbekistan," Working Papers 1703, University of Strathclyde Business School, Department of Economics.

    More about this item


    University; Collaboration; Technology and knowledge transfer; Research funding; Third mission;

    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes


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