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Performance-based research funding: Evidence from the largest natural experiment worldwide

Banal-Estanol, A., Jofre-Bonet, M., Iori, G. ORCID: 0000-0001-9443-9353 , Maynou, L., Tumminello, M. & Vassallo, P. (2023). Performance-based research funding: Evidence from the largest natural experiment worldwide. Research Policy, 52(6), article number 104780. doi: 10.1016/j.respol.2023.104780


A performance-based research funding system (PRFS) is a nationwide incentive scheme that promotes and rewards university research performance through competition for government funding. The UK’s PRFS, currently the Research Excellence Framework (REF), is considered the oldest, largest and most developed payment-byresults system in academia worldwide. Surprisingly, and despite the strong criticisms, little has been done to quantitatively and casually evaluate the intended and unintended effects of the PRFSs. In this paper, we evaluate the incremental impact of the REF 2014 in the fields of Economics and Business. We use a synthetic control method to compare the performance of UK universities with their artificial counterfactual units constructed using data from US universities. Our analysis shows, on the whole, that the introduction of the REF had a significant and positive impact on the quantity and quality of the scientific research produced at UK universities. However, we do not find a significant effect on the per author measures, suggesting that the REF did not result in an increase in research productivity. We also show that the effects are more heterogeneous across universities than across academic disciplines. We do not find evidence of a shift of research focus from Economics to Business topics, as some feared. But our analysis indicates that the REF 2014 may have contributed to the concentration of research excellence in elite institutions.

Publication Type: Article
Additional Information: © 2023. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Publisher Keywords: Research Policy; Research Productivity; Research Excellence Framework; Performance-based research funding system; Synthetic Control Method
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JN Political institutions (Europe) > JN101 Great Britain
L Education > LB Theory and practice of education > LB2300 Higher Education
Departments: School of Policy & Global Affairs > Economics
SWORD Depositor:
[thumbnail of REF_analysis_final.pdf] Text - Accepted Version
This document is not freely accessible until 11 April 2025 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

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