In this article we analyse whether university-industry relations (UIR) are penalising research activity and inhibiting university researchers? scientific productivity and, if so, to what extent. The analysis is based on a case study of two Spanish universities. We find that UIR exercise a positive effect on university scientific productivity only when they are based on the development of R&D
contracts, and when the funds obtained through these activities do not exceed 15% of the researcher?s total budget. We also find that researchers who combine research and UIR activities obtain higher funding from competitive public sources than that engage only in research. In addition, their average scientific productivity is higher and they achieve higher status within their
institutions than those members of faculty who concentrate only on research.