University spin-offs and the “performance premium”

Dirk Czarnitzki, Christian Rammer and Andrew Toole ()

Small Business Economics, 2014, vol. 43, issue 2, 309-326

Abstract: The creation of spin-off companies is often promoted as a desirable mechanism for transferring knowledge and technologies from research organizations to the private sector for commercialization. In the promotion process, policymakers typically treat these “university” spin-offs like industry start-ups. However, when university spin-offs involve an employment transition by a researcher from the not-for-profit sector, the creation of a university spin-off is likely to impose a higher social cost than the creation of an industry start-up. To offset this higher social cost, university spin-offs must produce a larger stream of social benefits than industry start-ups, a performance premium. This paper outlines the arguments explaining why the social costs of entrepreneurship are likely to be higher for academic entrepreneurs, and empirically investigates the existence of a performance premium using a sample of German start-up companies. We find that university spin-offs exhibit a performance premium of 3.4 % points higher employment growth over industry start-ups. The analysis also shows that the performance premium varies across types of academic entrepreneurs and founders’ academic disciplines. Copyright Springer Science+Business Media New York (Outside the USA) 2014

Keywords: Academic entrepreneurship; Start-ups; Firm performance; Technology transfer; Open science; University spin-off policy; Human capital; Social capital; L25; L26; J24 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (28)

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Working Paper: University spinoffs and the 'performance premium' (2013)
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DOI: 10.1007/s11187-013-9538-0

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