Impact of public seed-funding on academic spin-offs

In the entrepreneurial economy of today, it is not the multinational firms which are the predominant driver in the creation of new knowledge, but the individual entrepreneur. Correspondingly, new ventures of small size are leading in commercializing new knowledge and transferring it to the market. This economic shift has been reflected by broad entrepreneurship policies, which aim at supporting the individual on the challenge of a high-growth start-up. However, prior experience shows that uniform entrepreneurship policies do not address the individual needs in different countries and ecosystems adequately. In this paper, we study the performance of academic spin-offs that received public funding from the German EXIST Business Start-Up Grant, a support program which aims at increasing the number of innovative start-ups from academia. Using a control group matching approach, we provide evidence that these start-ups are smaller by two full time equivalent employees, generate 1.7 times higher losses and have a nearly three times lower return on capital than science-based entrepreneurial firms with comparable characteristics in the first 5 years after foundation. We interpret these results to be primarily caused by the inferior financial contracting structure of the program compared to private venture capital funding and by the resulting adverse selection and incentive effects on the entrepreneurs. The evidence calls for rethinking public interventions in a national system of entrepreneurship.     

Skilled unemployment and the creation of academic spin-offs: a recession-push hypothesis

Push factors associated with necessity entrepreneurship are largely neglected in the academic entrepreneurship literature. We link research on technology transfer to the literature on opportunity and necessity entrepreneurship, showing that the rate of academic spin-off creation is positively associated with the skilled unemployment rate. This longitudinal study of 559 spin-offs launched between 1999 and 2013, which controlled for several university- and context-level factors, showed that a higher level of unemployment reduced the probability of academic spin-off creation up to a threshold, beyond which the effect was reversed. By contrast, the relative skilled unemployment level was related positively to the probability of academic spin-off, particularly high-tech spin-off, creation. The relationship between the level of skilled unemployment and the creation of high-tech spin-offs was moderated positively by university research orientation and regional research and human capital intensity.     

Imprinting and the progeny of university spin-offs

In this paper, we employ a genealogical imprinting approach to theorize that experiences incurred during the founding of a first-generation university spin-off will influence future spin-off activity from the focal firm. We propose that firms that secure equity investment during their founding process will have a higher likelihood of generating subsequent spin-offs, and that this impact is conditional on the human capital of the founding team. We test our hypotheses on a sample of 101 first generation university spin-offs around a large US research university and their subsequent progeny firms. This study develops a new understanding of multi-generational spin-off processes in a region.     

The effect of board size and composition on European bank performance

Banks are “special” financial institutions generating distinct corporate governance challenges. The present paper examines the relationship between two of the most pertinent corporate governance factors—that is, the size of the Board of Directors and the proportion of non-executive directors—and firm performance on a sample of 58 large European banks over the period 2002–2004. The empirical analysis embraces a number of bank-specific variables. Our results reveal that bank profitability is negatively related to the size of the Board of Directors, while the impact of Board composition, although positive in all models, is, in most cases, insignificant. The results are robust after controlling for firm-specific variables.      

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.     

Support for public research spin-offs by the parent organizations and the speed of commercialization

We empirically analyze whether support by the parent organization in the early (nascent and seed) stage speeds up the process of commercialization and helps spin-offs from public research organizations generate first revenues sooner. To identify the impact of support by the parent organization, we apply multivariate regression techniques as well as an instrumental variable approach. Our results show that support in the early stage by the parent organization can speed up commercialization. Moreover, we identify two distinct channels—the help in developing a business plan and in acquiring external capital—through which support by the parent organization can enable spin-offs to generate first revenues sooner.     

Research collaboration in universities and academic entrepreneurship: the-state-of-the-art

There is abundant evidence that research collaboration has become the norm in every field of scientific and technical research. We provide a critical overview of the literature on research collaboration, focusing particularly on individual-level collaborations among university researchers, but we also give attention to university researchers’ collaborations with researchers in other sectors, including industry. We consider collaborations aimed chiefly at expanding the base of knowledge (knowledge-focused collaborations) as well as ones focused on production of economic value and wealth (property-focused collaborations), the latter including most academic entrepreneurship research collaborations. To help organize our review we develop a framework for analysis, one that considers attributes of collaborators, collaborative process and organization characteristics as the affect collaboration choices and outcomes. In addition, we develop and use a “Propositional Table for Research Collaboration Literature,” presented as an “Appendix” to this study. We conclude with some suggestions for possible improvement in research on collaboration including: (1) more attention to multiple levels of analysis and the interactions among them; (2) more careful measurement of impacts as opposed to outputs; (3) more studies on ‘malpractice’ in collaboration, including exploitation; (4) increased attention to collaborators’ motives and the social psychology of collaborative teams.     

The reform of academic tenure in the United Kingdom

In this paper, we examine the reform of academic tenure in the United Kingdom (UK) after the 1988 Education Reform Act.¹ We test the hypothesis that softening tenure encourages incumbent academics to consolidate their hold on academic life [ Carmichael (1988)]. We also assess the economic significance of the English and American case law on tenure, because an understanding of the legal aspects of tenure is required to identify the possible effects of tenure reform. The years after passage of the Act provide an interesting natural experiment, as the broad effect of the legislation was to soften, though not to remove, tenure in British universities. ² We can find support for the Carmichael hypothesis prereform but do not believe that the Act caused incumbent academics to consolidate their hold on senior posts after the reform.Tenure implies that the holder of a post cannot be removed from it except for good cause, usually based on gross moral turpitude or gross incompetence. Such removal is historically characterized by a costly procedure governed by organizational statutes, as shown in Hines v. Birkbeck College.³ In the United Kingdom, academic tenure has been associated with open-ended contracts of employment and often had a particularly hard form before 1988. In the United States, where it has often been possible to dismiss academics for financial reasons by abolishing whole departments, tenure has taken a softer form (although often harder to obtain) and can still be held to exist even when an employment contract is of a fixed term as long as it is renewable. ⁴ The details of universities’ tenure statutes have always varied between institutions, in both the United Kingdom and United States, which is often overlooked.

Abstract

“Before 1988, could your university make academics redundant by giving notice and paying statutory redundancy pay, or was it extremely hard to sack academics—having to buy them out or use arguments based on gross moral turpitude or incompetence?”     

Employee representation and board size in the Nordic countries

Several European countries have mandatory employee representation on company boards, but the consequences for corporate governance are debated. We use employee representation rules in the otherwise quite similar Nordic countries (Denmark, Finland, Norway, and Sweden) to elicit information on shareholder preferences for employee representation and board size. We find that shareholders tend to choose board structures that minimize the proportion of employee representatives. In Denmark and Norway employee representation depends on board size, and shareholders choose board sizes that minimize the number of employee representatives. However, many companies have more employee representatives than is mandatory. In Sweden, where the law mandates a fixed number of employee representatives (two or three depending on firm size), shareholders choose to have larger boards. In Finland, where employee representation is not mandatory, <1 % of companies choose to have it. Whatever, the merits of employee representation, shareholders appear to be mildly averse to it.     

Building bridges between the academic and practitioner communities in criminal justice

Criminal justice education is justified by its service To in-service and to pre-service clientele. Both of these functions can be enhanced by a closed working relationship between the academic and practitioner communities. This article describes various techniques for enhancing this relationship.     

Exploring Gender Differences in Citizen Allegations of Misconduct

ABSTRACT

Complaints that have been filed with the internal affairs office of a large police department in the Southeast were examined over a three year period. Possible differences between the male and female officers named in the allegations of misconduct were explored in the following areas: overall number of complaints; characteristics of the officer (age, race, and tenure); characteristics of the complaint; and characteristics of the citizen. While male officers were overrepresented in the allegations of misconduct, there were no significant differences found in the other areas of interest.     

The internationalization of science and its influence on academic entrepreneurship

We examine whether scientists employed in foreign countries and foreign-educated native researchers are more “entrepreneurial” than their “domestic” counterparts. We conjecture that foreign-born and foreign-educated scientists possess broader scientific skills and social capital, which increases their likelihood that they will start their own companies. To test this hypothesis we analyze comprehensive data from researchers at the Max Planck Society in Germany. Our findings provide strong support for the conjecture that academic entrepreneurship can be stimulated by facilitating the mobility of scientists across countries.     

Male Sex Work: Exploring Regulation in England and Wales

Whilst sex-work policy in England and Wales claims gender-neutrality, local and national prostitution strategies primarily focus on female street-based sex workers. Men who sell sex are generally absent or inadequately considered in such policies, and measures to regulate commercial sex markets are rarely considered in terms of their impact on male working practice. Drawing on the Coordinated Prostitution Strategy for England and Wales, this paper has two aims: first, to offer a gender-based critique of the current policy framework for England and Wales by arguing that sex-work policy is infused by a gendered understanding of sex work in which male identities are neglected or assumed deviant; and second to explore the notion that understanding sex work as it is performed locally is valuable when generating local and national policy. Informed by gendered readings of policy, social understandings of masculinity, and the (in)visibility of male sexual commerce this paper explores male sex work in the context of Manchester, England.     

Is academic freedom under threat in UK and US higher education?

This article explores the concept of academic freedom and whether it is under threat in US and UK higher education. How is ‘academic freedom’ protected by the law in each country? What are the threats to ‘academic freedom’—from government micro-management of universities, from commercial sponsors of university research, from managerialism/corporatism within university governance, from political correctness on the campus, from alumni-donors and the funders? Specifically, is academic freedom within UK universities challenged by recent anti-terrorism legislation; and in the USA by the neo-conservative ‘Academic Bill of Rights’ campaign? The conclusion is not pessimistic concerning the viability of academic freedom in both countries, but counsels wariness in watching out for threats if another McCarthy era is to be avoided.     

Signaling in academic ventures: the role of technology transfer offices and university funds

University spinoffs, an important subset of high-tech start-up companies, operate in a context characterized by marked information asymmetries that limit their chances of obtaining financing. Given the uncertainty and imperfect information that characterize these investment opportunities, signals about their potential value deserve further attention. We investigate the relationship between the main stakeholders involved in the process of creating a university spinoff—that is, the academic founders, the university technology-transfer office, and private investors—focusing on the role of public grants as effective signals that attract private venture capital (VC) funding. Using the database of all spinoff companies established to exploit inventions assigned to the University of Michigan from 1999 to 2010, we determine how the funds provided through the university technology-transfer office influence VC follow-on funding and consequent spinoff growth, controlling for the spinoff’s technology, the founders’ human capital, and the network’s resources. The empirical results support a signaling effect of the commercialization funds provided by the university and suggest an indirect impact on the growth of the spinoff’s sales through the mediating effect of VC financing.