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Abstract
The National Institutes of Health (NIH) is the largest funder of health and life science research in the United States. The research sponsored by the agency has continued to aid in the development of new biopharmaceutical therapies, many of which are commercialized via alliances between universities and biopharmaceutical firms. In this paper, we examine this commercialization pathway more closely, evaluating the effects of NIH research funding on US universities' alliance formation. Based on results from instrumental variables models, we estimate that, on average, producing one additional university-firm alliance requires a sustained increase of $294 million in universities' total NIH research funding over the preceding five-year period. In addition, a sustained increase in funding of $100 million over 5 years increases the probability of a university forming at least one alliance by 0.54, or 54 percentage points.