Efficiency and Technological Change at U.S. Research Universities

This paper investigates the determinants of efficiency and technological progress at US research universities. It relies on a unique panel data set of multiple outputs and inputs from 92 universities covering the period 1981-1998. Over that time span, US universities experienced large increases in industry funding and in academic patenting activity. In this context, the directional distance function and a nonparametric representation of the underlying production technology are combined to obtain estimates of productivity growth and technical efficiency. A pooled-Tobit estimator is used to examine the determinants of technical efficiency and the rate of technological progress. The results show how changes in funding sources for U.S. research universities affects research performance.