From university basic research to firm innovation: diffusion mechanism and boundary conditions under a U-shaped relationship

The paradox between China's dazzling S&T output and the technological dilemma of enterprises challenges the positive effect of basic research on technological innovation, and extant research has not solved this problem. To bridge this theoretical gap, we integrated resource dependence theory and institutional theory, and matched the data of universities and governments at the provincial level and the data of enterprises at the micro level to clarify whether and how university basic research promotes firm innovation. We found that: (1) there is a U-shaped relationship between university basic research and firm innovation. (2) University-enterprise cooperation, S&T services and paper achievements played a mediating role, but invention patent achievements did not. (3) Neither the supporting nor the intervening hand of the government can moderate the U-shaped relationship. (4) Only when the enterprise has no political connection, is located in the eastern region, and is not in the provincial capital city or special economic zone, is the U-shaped relationship established. Furthermore, the functional mechanism and boundary conditions of the U-shaped relationship are further clarified through a robustness test of variable substitution and sample subdivision. •We analyze the paradox between China's dazzling S&T output and the technological dilemma of enterprises.•We found that there is a U-shaped relationship between university basic research and firm innovation.•Neither the supporting nor the intervening hand of the government can moderate the U-shaped relationship.