Research Risk and Public Policy in a Knowledge-Based Economy: the Relative Research Efficiency of Government Versus University Labs

This paper contributes to the burgeoning literature about the knowledge economy by addressing the question of which intellectual-based institutions in an economy contribute the greatest amount to economic growth. In particular, we posit a theoretical model that compares the research efficiency of government research labs to university research labs. We conclude that there is merit in shifting public moneys from government research labs to university research labs from an efficiency perspective. This result opens the door for empirical research on relative research efficiencies and the implications for efficiency gains on economic growth. Copyright Springer Science+Business Media New York 2014