https://macropaperwarehouse.com/authors/kazushige-matsuda/Kazushige MatsudaHugo -- gohugo.ioen-usThu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/university-research-and-the-market-for-higher-education/Thu, 01 Jan 2026 00:00:00 +0000https://macropaperwarehouse.com/papers/university-research-and-the-market-for-higher-education/<p>This paper proposes that university R&amp;D is determined endogenously by competition for tuition and talented students in the market for higher education, and asks why universities fund research internally with tuition despite negligible returns to patenting. Motivation: between 2000 and 2018 U.S. universities accounted for 13% of aggregate R&amp;D spending and 53% of all basic-research spending, yet in 2018 over 25% of university research was internally funded (25.54% in 2018; federal government 52.97%) while between 1991 and 2018 the median university earned patent licensing revenue totaling less than 2% of its R&amp;D expenditure. Internal funds therefore come essentially from tuition.</p>