Abstract
This article studies the role of research orientation for attracting research grants at higher education institutions in Germany. Traditionally, research activities were funded by the institutions’ core budget. More recently, extramural research funding has become increasingly important. Besides the public sector, industry provides a growing share of such funds. The results based on a sample of professors in science and engineering suggest that basic and applied research is complementarity for attracting research funding from industry. Thus, professors who conduct basic research in addition to research on the applicability of their results appear to be most successful in raising industry funds. For raising grants from public sources, it turns out that specialization is more important. Specialized research units on either basic or applied research obtain significantly more public grants which point to a substitutive relationship between basic and applied research for grants from public sources.
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