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University spin-offs and the performance premium
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...
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| Format: | Article |
| Language: | English |
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2014
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| Summary: | 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 |
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| Physical Description: | 309-320 |