Business Partners: Complementary Assets, Financing, and Invention Commercialization

Thomas Astebro and Carlos Serrano

Journal of Economics & Management Strategy, 2015, vol. 24, issue 2, 228-252

Abstract: This paper assesses the relative importance of the complementary assets and financial capital that business partners may add to the original inventor‐entrepreneur. Projects run by partnerships were five times as likely to reach commercialization as those without business partners, and they had mean revenues approximately 10 times as great as projects run by solo entrepreneurs. These gross differences may be due both to partners impacting business success that is, who the particular partners were, and to selection of the type of project or of whom to select as a partner. After controlling for selection effects and observed/unobserved heterogeneity, the smallest estimate of partners' complementary assets approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean. Our findings suggest that a critical policy option to increase commercialization rates and revenues for early‐stage businesses is to support the market for finding skilled partners.

Date: 2015
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