Research Policy 36 (2007) 694–707 Impacts of grants and contracts on academic researchers’ interactions with industry Barry Bozeman a,∗ , Monica Gaughan b,1 a School of Public and International Affairs, University of Georgia, 201B Baldwin Hall, Athens, GA 30602, USA b College of Public Health, University of Georgia, N121 Coverdell Building, Athens, GA 30332-7397, USA Received 17 October 2005; received in revised form 24 January 2007; accepted 24 January 2007 Available online 26 March 2007 Abstract Based on a representative national sample of 1564 academic researchers, we investigate the impacts of research grants and contracts on the nature and extent of faculty research and technology activities with industry. A particular focus is on understanding the independent contributions of industry and government grant sources on levels of industrial involvement. In addition to examining the source of grants, the study controls for a number of independent factors including: scientific field, research center affiliation, tenure status, and gender. Results suggest independent effects of grants and contracts on industrial activities. Grants and contracts from industry have a significant effect on academic researchers’ propensity to work with industry, as measured by an “industrial involvement scale.” Federally-sponsored grants also have an impact in increasing work with industry, but a more moderate one. Further, those with more grants and contracts (of each type) have a greater propensity for industrial involvement than those who have such contracts but fewer. This holds even when proxies for productivity and career stage are introduced in regression equations. The analysis also considers whether provision of grants and contracts is best viewed as a predictor of industrial involvement or just another type of industrial involvement using factor analysis and nested multivariate modeling to compare effects. Published by Elsevier B.V. Keywords: Government grants; Industry grants; Industrial involvement; University research 1. Introduction Historically, academic researchers at U.S. universities have relied on government grants, overwhelmingly fed- eral government grants, to support their research. While U.S. industry is perennially the leading sector in both funding and performance of R&D, at no time during the history of the modern U.S. research university (i.e. the ∗ Corresponding author. Tel.: +1 706 583 5570; fax: +1 706 583 0095. E-mail addresses: bbozeman@uga.edu (B. Bozeman), gaughan@uga.edu (M. Gaughan). 1 Tel.: +1 706 583 8922; fax: +1 706 583 0695. university regime created after World War II) has indus- try provided as much support for university research as any of the top five government funding agencies. In 2002, U.S. academic institutions spent an estimated $36 bil- lion, or $33 billion in constant 1996 dollars, on R&D. U.S. industry provided 6.8% of academic R&D funding (National Science Foundation, 2004); this rate has been declining, to 5% of academic R&D funding (National Science Foundation, 2006). 2 2 For those unfamiliar with research funding in the United States, a few simple distinctions are useful. First, money provided to uni- versities from federal research funding agencies such the National Science Foundation or the National Institutes of Health are usually 0048-7333/$ – see front matter. Published by Elsevier B.V. doi:10.1016/j.respol.2007.01.007