The impacts of science and technology policy interventions on university research: Evidence from the U.S. National Nanotechnology Initiative

•We examine impacts of the National Nanotechnology Initiative on University Research.•NNI emphasizes commercialization and focused research to promote economic growth.•This policy intervention increased industry-to-university knowledge flows in U.S.•Branching-outs, research scopes and breakthroughs of UR also declined after NNI.•Targeted government S&T programs increase the efficiency of UR but do so at a price. We examine how the National Nanotechnology Initiative (NNI), a recent U.S. government science and technology (S&T) program launched in 2000, affects the nature of university research in nanotechnology. We characterize the NNI as a policy intervention that targets the commercialization of technology and a focused research direction to promote national economic growth. As such, we expect that the NNI has brought about unintended consequences in the direction of university–industry knowledge flows and the characteristics of university research output in nanotechnology. Using a difference-in-differences analysis of U.S. nanotechnology patents filed between 1996 and 2007, we find that, after the NNI, U.S. universities have significantly increased knowledge inflows from the industry, reduced the branching-out to novel technologies, narrowed down the research scope, and become less likely to generate technological breakthroughs, as compared to other U.S. and non-U.S. research institutions. Our findings suggest that, at least in the case of the NNI, targeted government S&T programs may increase the efficiency of university research, but potentially do so at a price.