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This article examines whether knowledge from academic research of varying quality can lead to differential quality innovation at the firm level via a knowledge spillover process—without the firm conducting the research and producing the knowledge but by using it as an external input to its innovation process. Based on econometric analysis of data reflecting patent activity of emerging entrepreneurial life sciences firms and thousands of academic publications, we find that higher-quality academic science associates with higher-quality industrial innovation. Importantly, we document that the degree that a given firm conducts basic science moderates this relationship. Our work develops a novel theoretical and empirical link between academic knowledge quality and industrial innovation and identifies the contingencies that allow this link to materialize

Academic knowledge quality differentials and the quality of firm innovation