Just teaming up with a college makes a company's stock easier to sell because investors love that "academic halo."
SSRN · March 18, 2026 · 6430626
The Takeaway
We usually think industry-university partnerships are about getting better patents or technology. This paper reveals a 'sentiment pathway' where the mere association with a prestigious university lowers a firm's cost of capital by reducing investor skepticism and lowering the risk premium they demand.
From the abstract
Industry-university collaboration (IUC) is a central element of innovation policy worldwide, yet evaluations of its effectiveness have focused almost exclusively on innovation outputs. This study examines whether IUC generates an additional, previously overlooked economic return: a reduction in firms’ cost of equity capital. Using data from Chinese A-share listed companies during 2007-2022, we find that firms engaged in IUC experience a significant reduction in their cost of equity capital, an e