In the 1980s, the Chinese state pushed the Chinese Academy of Sciences (CAS) to establish businesses. Some of these businesses did not engage in any research and development (R&D), and this resulted in scientists having concerns about the boundary around the institutionalizing scientific community. When the state supported CAS’s ‘Knowledge Innovation’ reform in the late 1990s, CAS’s organizing principle became centered on a more narrowly scientific logic, which led to less reliance on business income. Regression analysis indicates that CAS-owned enterprises without R&D were more likely to be discontinued during ‘Knowledge Innovation’. Moreover, businesses having no R&D were more likely to be discontinued (1) if they were making high profits and (2) if they were supervised by an institute in which Academicians had longer tenure, because these conditions heightened science-market conflict.