| Abstract: |
Whether financial returns to university licensing divert faculty from basic
research is examined in a life cycle context. As in traditional life cycle
models, faculty devote more time to research, which can be either basic or
applied, early and more time to leisure as they age. Licensing has real
effects by increasing the ratio of applied to basic effort and reducing
leisure throughout the life cycle, but basic research need not suffer. When
applied effort adds nothing to the stock of knowledge, licensing reduces
research output, but if applied effort leads to publishable output as well as
licenses, then research output and the stock of knowledge are higher with
licensing than without. When tenure is added to the system, licensing has a
positive effect on research output except when the incentives to license are
very high. |