Innovation and industry-academia collaboration

We examine how failures of academic integrity impact industry-university collaborations. Using university paper retractions as a shock to the credibility of upstream scientific knowledge, we show that retractions meaningfully weaken the innovative performance of connected firms. Firms linked to retracting universities experience decreases in both the quantity and quality of subsequent innovation, alongside a deterioration in the effectiveness of transformation of their R&D efforts into successful innovations. Capital markets respond negatively to retraction announcements, indicating that investors view these shocks as impairing firms’ innovation prospects. In addition, retractions disrupt ongoing collaborations and sharply reduce the formation of new industry-university partnerships. Overall, our findings reveal that scientific misconduct and related disruptions extend beyond academia: they hinder corporate innovation productivity and reshape firms’ strategies for accessing external knowledge. The results highlight scientific integrity as a foundational determinant of the functioning and resilience of collaborative innovation systems.