Efficiency and Technological Change at U . S . Research Universities

This paper investigates the determinants of efficiency and technological progress at US research universities. It relies on a unique panel data set of multiple outputs and inputs from 92 universities covering the period 1981-1998. Over that time span, US universities experienced large increases in industry funding and in academic patenting activity. In this context, the directional distance function and a nonparametric representation of the underlying production technology are combined to obtain estimates of productivity growth and technical efficiency. A pooled-Tobit estimator is used to examine the determinants of technical efficiency and the rate of technological progress. The results show how changes in funding sources for U.S. research universities affects research performance. JEL Codes: O3, O31, O33, C6, L31 + Corresponding Author: Jeremy Foltz, Taylor Hall, University of Wisconsin-Madison, 427 Lorch Street, Madison WI 53706. Tel: (608)262-6871; Fax (608) 262-4376; Email: [email protected]. * Respectively, assistant professor, professor, and professor, Department of Agricultural and Applied Economics, University of Wisconsin-Madison; and assistant professor, Seoul National University. The authors would like to thank Hsiu-Hui Chang, Seth Gitter, and Nicholas Magnan for help with the data and the Food System Research Group’s Director, Kyle Stiegert, for providing partial funding. Funding has also been provided for this research from the USDA Cooperative State Research, Education and Extension Service (CSREES) project WIS0-4725. Any errors or omissions remain the responsibility of the authors. Efficiency and Technological Change at US Research Universities