Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/328706 
Year of Publication: 
2023
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 11 [Issue:] 3 [Article No.:] 81 [Year:] 2023 [Pages:] 1-13
Publisher: 
MDPI, Basel
Abstract: 
Competition is a core feature of science and has for some time also been viewed by institutions in the higher education sector, as well as the state, as an incentive to produce scientific output. Due to scarce financial resources third-party funding plays an increasingly important role. However, the race for the coveted grants also has its downsides and can lead to a loss of efficiency. To advance the discussion concerning grant competition we present a rent-seeking model that helps to understand the crucial factors influencing overall welfare. We show that the extent of the increase in productivity of independent research triggered by the grant competition, the extent of administrative expenses and the productivity of the research financed by the grant are decisive. Our main implications for policy-makers and university managers are that competition for third-party funding brings positive and negative effects and therefore, for the individual situation of the university, it has to be carefully considered whether scarce resources are invested in applications and that grant procedures should be designed in such a way that both a Matthew effect and a path-dependency effect are avoided.
Subjects: 
funding
grants
higher education
public finance
rent seeking
research
universities
JEL: 
D69
D72
H39
I23
O31
O3
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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