The economics of university-industry research linkages

Cooperative research can involve various combinations of government, industry, and the university. This article focuses on university-industry cooperative research interactions or linkages. Such linkages involve a network of money, information, and human effort flows between the science and engineering sector of the university and its counterpart in business firms. The university is modeled as a multiproduct-multisector nonprofit organization where the linkages are produced by research faculty. A dynamic control theory approach is used to shed light on the economic decisions of the university relating to the hiring of faculty and the production of products. One likely result of such decisions is the fallover time of undergraduate output and the rise of research output. Since research output is an element in overall technological change, the internal management of the university has public policy implications. Other policy values of the analysis are also indicated.