Title: The Economic Impact of University R&D in Relation to University Patenting
Author(s): Jaewon Choi
Affiliation: State University of New York
Presented At: STiS 2008
Primary Topic Area: Innovation Studies
The main goal of the Bayh-Doll Act in 1980 was, by allowing university patenting, to increase technology transfer to private industry. By making university inventions available exclusively for licensing, private industry will have opportunities to develop commercial products by utilizing knowledge generated from university research. Even though most studies have found a positive relationship between university R&D and economic growth, the role of university R&D on economic growth has not been clearly understood. This study looks at patenting as a mechanism to enhance the long-term impact of university R&D on economic growth. A public policy that emphasizes diffusion of knowledge can achieve static efficiency, while it can harm long-term dynamic efficiency, as a trade-off. University R&D policy that is intended to contribute sustained economic growth should consider this trade-off. Previous empirical studies mostly use university R&D expenditure to measure the stock of knowledge accumulated by university R&D. We assume that the effect of university R&D expenditure on productivity depends on how university R&D effort is transferred to the economy. By looking at the interaction between university R&D expenditure and university patenting, we try to clarify the relationship between university R&D and economic growth.
We use total factor productivity, R&D expenditures and patent data for the US and its trading partners from 1970 to1999. Regression result shows that university R&D expenditure itself has negative effect on economic growth, while university patenting enhances the positive impact of university R&D on productivity. The result suggests that the opportunity cost of university R&D might be too high if university R&D policies cannot channel through the resource and effort of university to patenting.