The purpose of this study was to conduct an econometric analysis of internal resource allocation. Two theories are used for this study of resource allocation in public research universities, and these are: (1) Theory of the Firm; and (2) Resource Dependence Theory. This study used the American Association of Universities Data Exchange (AAUDE) database, an underutilized data source containing valid and reliable estimates of expenditures and enrollments for the leading research and doctoral-granting universities in the nation. In this study, the author gathered expenditures, proxies for institutional allocations, and student credit hour production data from 53 types of constituent departments across five departmental fields: computing and mathematics, engineering, life sciences, physical science, and social science. OLS multiple regression model relating institutional resource allocation to measures of departmental output for academic units in the sciences were used. Findings were presented in terms of teaching productivity, research productivity, and departmental quality. In this article, the author discusses implications of the study and recommendations for future research. (Contains 3 tables and 1 footnote.)