Growth factors of research-based spin-offs and the role of venture capital investing

Using a proprietary dataset of 98 German research-based spin-offs (RBSOs) founded between 1997 and 2012, we assess which firm-specific and system-inherent factors are decisive for the spin-offs’ growth drawing on the resource-based view. Specifically, we aim to evaluate whether venture capital-backed RBSOs outperform non venture capital-backed RBSOs and whether a performance difference is explained by venture capitalists’ scouting or coaching capabilities. Our empirical findings detect that a homogeneous educational background of the academic entrepreneurs is positively associated with RBSO growth. A training provided by the parent research organization intended to develop entrepreneurial skills and to establish a network to outside professionals as well as the commercialization of a novel technology have a positive impact on firm growth. Concerning the involvement of venture capitalists, venture capital-backed RBSOs show a superior employment and revenue growth compared to non-venture capital-backed RBSOs. Our results support the view that this superior performance is attributed to venture capitalists’ coaching rather than their scouting capabilities.     

Public research and the innovation performance of new technology based firms

Assessing the role of publicly funded scientific research in entrepreneurial ecosystems is of great interest for science and entrepreneurship policy. Knowledge from academic research flows into the private sector through publications, patents, and researcher mobility as well as through direct interactions between founders and researchers at public research institutions (PRIs). New technology-based firms (NTBFs) are generally praised for high innovativeness despite their resource constraints and liability of newness. This study therefore investigates the impact of direct interactions with PRIs on NTBFs’ innovation success. In a large sample of NTBFs in Germany, we find that those firms engaging in such knowledge interactions are more likely to introduce new products and services to the market. The strength of this association, however, depends on interaction persistency, internal R&D and the founders’ academic backgrounds. Non-academic start-ups benefit more from continuous informal interactions if they pursue own R&D, which suggests that absorptive capacity matters. In academic start-ups, higher intensities of both formal and informal interactions are associated with greater innovation likelihood. Moreover, continuous informal interactions complement formal ones in the absence of own R&D activity.

     

Firms’ rationales for interaction with research universities and the principles for public co-funding

R&D managers at 50 firms who have formal relations with two research universities in Stockholm are interviewed about their rationales for collaboration. Drawing on this material, a distinctive typology of rationales for establishing cooperative relations is presented. While the typology demonstrates a considerable breadth of interaction rationales, rationales related to innovation, in terms of invented or improved products or processes, are found to be the main drivers for interaction. Based on this framework, we analyse which rationales for interaction are consistent with public rationales for supporting university-industry relationships. Public co-funding that allow firms to influence (part of) the academic agenda is identified as a particularly interesting case that requires further theoretical attention.     

University technology commercialization through new venture projects: an assessment of the French regional incubator program

This article assesses the performance of a technology business incubator program, established by the French government to support innovative new science and technology-based firms (NSTBF) that seek to commercialize laboratory research results. With a resource-based view and an institutional approach, this study predicts why some incubators may be more successful than others in supporting the development of NSTBF. An original longitudinal data set represents the results of a public incubator program, funded following the passage of a 1999 French law on innovation and research. The findings refer to a sample of 25 operationally active incubators and their 1200 graduated new ventures. This study contributes to the literature on business incubation by showing the importance of various incubator resource inputs for aiding NSTBF projects. It thus provides useful and timely feedback for researchers and policy makers.     

Relative importance of external R&D: Trends and motivations

This paper reports the findings of our survey study of the methods firms use to generate new basic and applied research and development (R&D). By far, the most important source of new R&D are the firms' in-house programs. This finding holds for firms of all sizes. External R&D arrangements are most common for basic research, although most firms indicated that in the future they expect to increase their reliance on external sources for applied R&D. Small firms tend to acquire technology from the provider, whereas larger firms seem to utilize licensing agreements for gaining access to the results of R&D. Large firms may also be using more of a portfolio approach to external R&D in that they often use several different sources. They also appear to form their outside R&D ventures not only for traditional cost/risk-sharing reasons but also for strategic and competitive reasons. Their attempts to diversify their sources of technology are just as important as the traditional cost- and risk-sharing motivation. Finally, although some collaborative R&D ventures are in response to foreign competition, this appears to be of more concern to mid-sized firms than small or large ones.     

When Social Norms and Pressures Are Not Enough: Environmental Performance in the Trucking Industry

Why do some business firms and not others work hard to advance regulatory values such as environmental protection and comply with regulations? Previous research indicates that business firms are influenced in that regard by a number of variables—not merely the perceived likelihood of legal punishment but also the risk of negative reactions by societal actors (which we call “social license pressures”) and the intensity of managers' commitment to norms of law‐abidingness and environmentalism. This article reports on a study of control of diesel emissions in the trucking industry, a highly competitive market with many small firms, mobile pollution sources, expensive “best control technologies,” and weak regulatory demands. In contrast to findings in studies of large firms, we found that social license pressures on small trucking firms are minimal. Trucking companies' environmental performance—good and bad—flows from managers' economic choices, which are influenced by their particular market niche. In such highly competitive, small‐firm market contexts, these findings imply, significant improvement in environmental performance is not likely without strong direct regulatory pressures.     

In search of the profit-maximizing actor: motivations and definitions of success from nascent academic entrepreneurs

Scholars have traditionally assumed the establishment and management of university spinoffs are guided by growth and the pursuit of profit. However, few studies have examined the motivations and post-establishment success definitions of entrepreneurs themselves. This paper seeks to contribute to our understanding of the mediating factors of academic entrepreneurship through an in-depth interview-based study of 74 nascent academic entrepreneurs. The results show that academic entrepreneurs define success in a number of complex, interrelated ways including technology diffusion, technology development, financial gain, public service and peer motivations, among others. Furthermore, a large percentage of the respondents have little immediate interest in growth and have instead established their firms to pursue other sources of development funding.     

Technology Transfer via the Internet: A Way to Link Public Science and Enterprises?

The Internet is receiving increasing attention as a medium for technology transfer between public research and the business sector. Technology policy hopes that Internet presentations of research activities at public institutions will facilitate the exploitation of research results, particularly from those institutions not engaged in technology transfer so far. Based on a survey of public research units in natural sciences and engineering in Germany, we analyze the determinants of firm contacts established via the Internet. Special attention is paid to the effect of experiences in firm interaction in the past. Estimation results suggest that Internet contact to firms is more likely to be established by public research units that are already well situated in the transfer market. Research units that orient their homepage design towards the business sector are more likely to build Internet-based contact with firms. However, there is no evidence that public research units that have not been engaged with firms so far, use the Internet more intensively to get into the transfer business. Our results show that the Internet has a certain potential for advancing technology transfer at public research, although this potential is not fully utilized yet, at least in the case of Germany.     

Do Academic Spin-Outs Differ and Does it Matter?

This paper questions the widespread tendency to view academic spin-outs as an undifferentiated category and explores typologies of companies originating in universities, using a Penrosean conceptualization of entrepreneurial activity. We initially identified five main types of business activities pursued by academic entrepreneurs, which we revised after analyzing a database of Cambridge University spin-outs and real-time exemplars of emerging ventures. The refined typology takes into account the dynamic of the entrepreneurial process. As the business models of ventures evolve they may enter a different category of business activity. We conclude by discussing the academic and practical needs for a better understanding of the heterogeneity of spin-outs, the diversity of which has theoretical and policy implications.     

Slack resources,exploratory and exploitative innovation and the performance of small technology-based firms at incubators

This paper aims to contribute (1) to the understanding about how small technology-based firms in spite of being constrained by limited resources, can still perform exploratory and exploitative innovation and (2) to extend knowledge about the role of slack resources in the context of small technology-based firms in facilitating those innovation activities. Herein, we focus on two types of slack resources: internal slack, resources that are available within the firms and external slack, additional resources that are gathered through the facilitation of external sources such as business incubators. Using a sample of 141 small technology-based firms located at incubators, this study combined two streams of research on incubator studies and innovation to construct some hypotheses examining the role of slack resources and innovation activities in enhancing the performance of small technology-based firms operating in incubator setting. Our findings demonstrate that neither slack resources nor innovation activities alone explain firm performance. Instead, small technology-based firms fit their innovation activities to their slack resources. While the relationship between internal slack and performance is mediated by exploitative innovation, exploratory innovation plays a role as a mediator for the relationship between external slack and performance.     

Mixed Motives: Economic,Social, and Normative Motivations in Business Compliance

This article develops theoretical understanding of the motives of business firms and their managers for compliance. First, we develop a typology to conceptualize and measure business motives relevant to compliance behavior. We distinguish between three categories of motives: economic, social, and normative. We hypothesize, however, that business firms and their managers do not divide into types motivated exclusively by singular priorities. We expect each firm to hold a constellation of plural motives. Moreover, we expect that economic and social motives are more alike between regulatees within the same regulatory regime than normative motives. Second, we conduct a preliminary test of the plausibility of our typology of motives and our theory of constellations of plural motives using data from a survey of the thousand biggest companies in Australia. Finally, we conclude that the path from fundamental interests or motives to behavior is filled with constraints and contingent factors at the individual, organizational, and structural levels.     

University R&D and Firm Productivity: Evidence from Italy

Ed Mansfield wrote several papers on the private returns to basic research (e.g. Mansfield, 1980) and the influence of academic research on industrial innovation (e.g. Mansfield, 1991). We extend this line of research by assessing the impact of university research on total factor productivity growth of Italian manufacturing firms. The econometric analysis is based on reduced-form estimation of the R&D capital stock model, including controls for two potential sources of sample selection bias, as proposed by Crepon et?al (1998) and Piga and Vivarelli (2004). Our results suggest that while there are positive returns to collaborative research with other firms, collaborative research with universities does not appear to directly stimulate productivity. We interpret this result as consistent with recent evidence (e.g. Hall et?al 2001, 2003) suggesting that firms engage in collaborative research with universities when appropriability conditions are weak.     

The legal profession of China in a globalized world: innovations and new challenges

ABSTRACT

The legal profession is undergoing fundamental changes; and this is the case not just in established legal markets. Based on a state-of-the-art sketch, this paper identifies and analyzes the latest innovation initiatives and alternative business models in China’s legal profession. It finds that, propelled by market demands and benefiting from technological advancements, the provision of legal services has become highly versatile today, giving rise to various alternative service providers, especially the rapidly rising online legal service portals. Because they are technically not law firms, the exclusivity requirements on lawyer ownership and legal service provision are not applicable to them. In the meantime, the competition for large corporate clients and lucrative business transactions is fierce and will continue to be so, not only within the club of big Chinese corporate law firms, but also between Chinese law firms and international law firms globally. In this course, some leading big corporate law firms in China are observed to have creatively incorporated key corporate features in running their business and compensating their partners, effectively deviating from the partnership?+?pure legal services regulation. Such market realities question the necessity and effect of the regulatory restrictions on law firm legal form and ownership structure, and call for an agenda for related research in the future.     

Do graduated university incubator firms benefit from their relationship with university incubators?

Business incubators have become a popular policy option and economic development intervention tool. However, recent research shows that incubated firms may not benefit significantly from their incubator relationships, and may even be more vulnerable to failure post departure (graduation) from an incubator. These findings suggest that the impact of business incubation on new venture viability may be contingent on the type of support offered by an incubator and attributes of business environments within which incubation services are provided. Incubation services that protect and isolate ventures from key resource dependencies may hinder venture development and increase subsequent vulnerability to environmental demands. Alternatively, incubation services that help ventures connect and align with key resource dependencies are likely to promote firm survival. We propose that incubators vary in the services and resources they offer, and that university incubators typically provide greater connectivity and legitimacy with respect to important contingencies associated with key industry and community stakeholders. This leads us to propose that university affiliation is an important contingency that affects the relationship between firms’ participation in incubators and their subsequent performance. The purpose of this study is to evaluate this contingency by examining whether firms graduating from university incubators attain higher levels of post-incubation performance than firms participating in non-university affiliated incubators. We test this by evaluating the performance of a sample of graduated firms associated with the population of university-based incubators in the US contrasted against the performance of a matched cohort of non-incubated firms. The analysis uses an enhanced dataset that tracks the number of employees, sales, and the entry and graduation (departure) points of incubated firms from a university incubation program, so as to delineate the scope of influence of the incubator.     

An Objective Corruption Risk Index Using Public Procurement Data

In order to address the lack of reliable indicators of corruption, this article develops a composite indicator of high-level institutionalised corruption through a novel ‘Big Data’ approach. Using publicly available electronic public procurement records in Hungary, we identify “red flags” in the public procurement process and link them to restricted competition and recurrent contract award to the same company. We use this method to create a corruption indicator at contract level that can be aggregated to the level of individual organisations, sectors, regions and countries. Because electronic public procurement data is available in virtually all developed countries from about the mid-2000s, this method can generate a corruption index based on objective data that is consistent over time and across countries. We demonstrate the validity of the corruption risk index by showing that firms with higher corruption risk score had relatively higher profitability, higher ratio of contract value to initial estimated price, greater likelihood of politicians managing or owning them and greater likelihood of registration in tax havens, than firms with lower scores on the index. In the conclusion we discuss the uses of this data for academic research, investigative journalists, civil society groups and small and medium business.     

University–Industry collaboration in the biopharmaceuticals: the Italian case

We investigate the determinants of University–Industry (U–I) interactions in the biopharmaceuticals in Italy over the period 2004–2010, choosing co-publishing as a proxy of U–I partnerships. We construct a novel dataset of co-published articles, that contains measures of proximities, agglomeration, firms’ and universities’ characteristics. Following a consolidated methodology, we integrate our dataset of effective interactions with the set of all potential interactions, to estimate probabilistic models for the occurrence and the intensity of U–I interactions. Our main findings confirm and extend the predictions of the previous literature: (1) geographical proximity and prior partnership increase the probability and the intensity of co-publication; (2) the proximity of a firm to other biopharmaceutical firms and universities attenuates the relevance of geographical proximity; (3) there exists complementarity between prior partnerships and geographical proximity. A novel result is that firms’ and Universities’ size, firms’ R&D and patents expenditure and the composition of the academic staff as well as quality of academic research exert a significant impact on the intensity of co-publishing.     

Ready to leave the ivory tower?: Academic scientists’ appeal to work in the private sector

This study investigates the factors that shape the attitudes of scientists toward starting their own business or working in a private sector firm. The analysis is based on data collected from scientists working in the German Max Planck Society, a research institution devoted to basic science. We find that the scientists’ attractiveness of working in a private sector firm or of starting their own business differ considerably according to their academic discipline and the self-reported commercial potential of their research. The ability to take risks, prior work experience in private firms, and personal experience in cooperating with industry lead to a positive attitude towards switching to private sector employment or entrepreneurship. Strong willingness to freely distribute research findings is related to a low appeal of private sector work.     

Business Development Support and Knowledge-Based Businesses

Knowledge-based businesses are vital to the economic development and revitalization of many regions, especially areas that have experienced a decline in traditional industries. Notwithstanding the importance of KBBs to areas with marginal economies, little is known about the business development support requirements of these firms and the extent to which their support needs are being met. Through the use of a telephone survey, this empirical study investigates the demand-side perspectives and experiences of entrepreneurs in a peripheral region of Canada to determine the types and sources of support used at various stages of business development, and to identify potential support gaps. Findings indicate support used by KBBs differs from more traditional firms and that support needs change as firms move through the life cycle. There appears to be a low level of awareness among firms in the study region of available support services and a perception that support beyond the start-up stage is generally lacking. These findings have important implications for researches and for agencies with a business development support mandate.     

The global restructuring of legal services work? A study of the internationalisation of Australian law firms

The research discussed in this paper examines the ways that an elite group of law firms in Australia are contributing to the globalisation of business and restructuring of legal services work. We examine the distinctive commercial orientation and institutional corporate connections of this group, focusing exclusively on the continuities, breaks and reconversions of the Australian legal profession. Our findings reveal an institutionalised reproduction of strategic practice favouring the elite group of players that generally complies with the political, economic and symbolic power currently wielded by US and UK firms. The data specifically on the recent phase of internationalisation of legal services show Australian lawyers to be of lower status when compared to elite US and European law firms. Using a Bourdieuian method of analysis we explore the extent to which these Australian lawyers' strategic accounts show the potentially coercive and mimetic influence of the economic and symbolic capitals of dominant groups. We apply Sklair's global system theory as a means of interpreting Australian law firms' collective strategic intent, which at the time of this research is to develop a global competitive presence in markets in the Asia Pacific region.     

Beyond incubation: an analysis of firm survival and exit dynamics in the post-graduation period

With regard to the survival rates of business incubator (BI) firms, the literature mainly presents findings of failure rates only during the incubation period. Little is known about the survival or exit dynamics of firms after leaving the incubator facilities. This study approaches this research question by examining the survival of 352 firms from five German BIs after their graduation. The findings suggest that graduation causes an immediate negative effect on survivability that lasts up to 3 years after leaving the incubators. Furthermore, heterogeneous patterns of post-graduation exit dynamics between the BIs were observed. It was also found that performance during the incubation period is an indicator of the propensity of business closure after graduation. This study offers valuable insights and implications for all stakeholders of BI-initiatives.