Government and Business Funding of Sources of Funds for R&D at Universities: Complements or Substitutes?

Jan Hunady, Pisár Peter (), Jošić Hrvoje (), Žmuk Berislav () and Bach Mirjana Pejić ()
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Pisár Peter: PhD, Professor, Faculty of Economics, Matej Bel University in Banska Bystrica
Jošić Hrvoje: PhD, Associate Professor, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia
Žmuk Berislav: PhD, Associate Professor, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia
Bach Mirjana Pejić: PhD, Professor, University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia

South East European Journal of Economics and Business, 2023, vol. 18, issue 2, 97-111

Abstract: The paper examines the relationship between different sources of funding for research and development at universities. Following the European Commission methodology, we distinguished between government, business and abroad financing of research and development (R&D) in the higher education sector. The paper aims to test short-run and long-run relationships between different funding sources. We are focused on the relationship between government and business funding of R&D at universities. Based on panel data for EU countries, we applied the Granger causality tests and General methods of moments to examine short-run causality and cointegrating regression to search for potential long-run relationships. Our results suggest that government funding of R&D act as a complement to business funding. Hence, rising government financial support for research in higher education can, lead to higher funding from the business sector. Founding from abroad seems to have a similar effect on business funding in the long run.

Keywords: research and development; funding; higher education; university; Europe (search for similar items in EconPapers)
JEL-codes: C23 I22 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:seejeb:v:18:y:2023:i:2:p:97-111:n:3

DOI: 10.2478/jeb-2023-0021

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