The economics of research, consulting, and teaching quality: theory and evidence from a technical university

We investigate the effect of both research and consulting on teaching quality in higher education, at the individual level. We propose a theoretical model in which academics allocate effort between the three activities, over a two period time horizon, under the assumption of positive spillovers from research to both consulting opportunities and teaching, and of life-cycle effects on incentives. Propositions from the model are tested against data from a mid-sized Italian engineering faculty. We find that teaching quality is negatively related to consulting and positively related to research experience. However, both relationships are not linear, due to the importance of several mediating factors, such as seniority and the role of scientific publications as a signal for attracting consulting opportunities.