This paper estimates the effect of heterogeneous university funding stemming from the German Excellence Initiative on a regional firm’s probability to innovate by using a multi-valued two-way fixed effects difference-in-differences model. The estimations show that funding an additional...

University research provides valuable inputs to industrial innovation. It is therefore not surprising that private sector firms increasingly seek direct access through funding public R&D. This development, however, spurred concerns about possible negative long-run effects on scientific...