Chasing two hares at once? Effect of joint institutional change for promoting commercial use of university knowledge and scientific research

Stimulating the university’s scientific research while encouraging the commercial use of the resulting knowledge is one of the foremost missions to science policymakers. This study examines the short-term impact of joint institutional changes for facilitating the commercial use of university knowledge and stimulating scientific research activities by introducing a research performance evaluation system on the university scientists’ research outcomes. Our empirical analysis is based on Japan’s national university reform in 2004, which introduced institutional measures to support the income-generating activities of academic staff while implementing a regular evaluation of their performance. Using data on over 5,000 scientists in Japan’s national and private universities, we find an increase in the research productivity among national university scientists without a significant change in their research quality by this institutional change. Moreover, we find evidence showing that the reform induced more scientists to engage in research that serves as a knowledge input for developing technological applications. These short-term effects are specific to the scientists in the Life Science domain and those who were inactive in developing technical applications before the reform. We discuss the contributions of the present study to the strain of literature on how an institutional change to encourage commercial use of university knowledge affects science and draw the implications for science policy therein.