ACADEMIC R&D ACROSS THE STATES: EFFICIENCY AND ITS DETERMINANTS

Abstract

A review of the literature suggests that there are few studies on the efficiency of academic research and development (R&D) funding in the United States. Much of the extant literature focuses on efficiency assessments at either the academic department level or the university level. We are not aware of any studies that analyze the efficiency of academic R&D funding at the state level. The purpose of this paper is to fill this void by assessing the efficiency of academic R&D funding at the state level using Data Envelopment Analysis (DEA), a non-parametric efficiency estimation method that can utilize multiple inputs and outputs to create a single efficiency score. The DEA results, along with results in changes in R&D productivity over time, suggest that some U.S. states are relatively better positioned to turn their R&D dollars into academic and business outputs. Tennessee is used as an example to show how to apply the DEA results to guide policy decisions toward efficiency. Tobit model results imply that the diversity of funding source, university R&D intensity, and R&D concentration are key for R&D funding efficiency. The policy implications of the study findings are discussed.