Do academic spin-offs outperform young innovative companies? A comparison of survival rates and growth

Abstract

PurposeThis article investigates the distinctive characteristics and the performance of academic spin-offs within young innovative companies (YICs) supported by public regional agencies. Considering that academic spin-offs are characterized by high intensity in innovation and technology transfer, we raise the issue of their performance relative to other YICs.Design/methodology/approachThe authors focus on YICs which receive support from public or semi-public institutions at the early stage of their development as a reward for their innovative business ideas. The study is performed in two steps. First, the authors estimate the growth of the academic spin-offs within a set of YICs supported for fewer than 5 years. This estimation is based on data gathered in 2014. Second, the authors investigate the survival of these supported YICs with the Cox proportional hazards model, 5 years later, at the end of 2019.FindingsResults reveal that academic spin-offs are more able to capture resources in the early stages: These firms have more patents, more external funding and higher increases in the number of employees. The authors also demonstrate that academic spin-offs have the highest survival rates.Research limitations/implicationsThe drawback of the studies on ASOs is the limited sample. The main issue is related to survival analysis. Limitation of the sample sizes precludes from in-depth survival analyses, which may highlight fundamental differences in the development patterns of the firm.Practical implicationsThe study’s results provide evidence on how the identity of academic spin-offs based on technology transfer act as a positive signal to obtain legitimacy. It is of particular interest for entrepreneurs who can rely on trust provided by their parent institution to engage in negotiations with different stakeholders. Moreover, results give insights to policymakers on the usefulness to invest on academic spin-offs because of its outperforming results.Originality/valueThe results provide important insights for designing, conducting and monitoring policies that favor innovation. Moreover, it demonstrates to universities, research institutions and entrepreneurs engaged in technology transfer the economic and social usefulness of their approach.