Research Funding and Regional Economies

Nathan Goldschlag, Stefano Bianchini (), Julia Lane, Joseba SanMartin Sola and Bruce Weinberg

No 10081, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Public support of research typically relies on the notion that universities are engines of economic development, and that university research is a primary driver of high wage localized economic activity. Yet the evidence supporting that notion is based on aggregate descriptive data, rather than detailed links at the level of individual transactions. Here we use new micro-data from three countries - France, Spain and the United States - to examine one mechanism whereby such economic activity is generated, namely purchases from regional businesses. We show that grant funds are more likely to be expended at businesses physically closer to universities than at those farther away. In addition, if a vendor has been a supplier to a grant once, that vendor is subsequently more likely to be a vendor on the same or related grants. Firms behave in a way that is consistent with the notion that propinquity is good for business; if a firm supplies a research grant at a university in a given year it is more likely to open an establishment near that university in subsequent years than other firms.

Keywords: science policy; innovation; regional economic development; UMETRICS (search for similar items in EconPapers)
JEL-codes: O30 R10 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2016-07
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino, nep-knm, nep-ppm, nep-sbm and nep-ure
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Working Paper: Research Funding and Regional Economies (2016)
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