Date Added: Nov 2009
This paper analyzes the effect of public and private third-party funds on the efficiency of departments of Swiss public research institutions. Estimating an output distance function assuming that labor is used to produce master students and scientific publications, the authors find no statistically significant effect of private or public third-party funding on research efficiency. However, once they include technology transfer as an additional output, the coefficient of private funding is statistically significant. They further find that this disciplining effect of private funding is qualitatively robust in a setting controlling for endogeneity.