How do business incubators govern incubation relationships with different new ventures?

Abstract

For both business incubators (BIs) and new ventures (NVs), the incubation relationship holds great significance. Prior studies have focused on the effect of incubation relationships, namely, the performance of NVs and the performance of BIs. However, they have neglected how BIs govern incubation relationships with different NVs, which is the prerequisite to translating incubation relationships between BIs and NVs into performance. To bridge this gap, we adopt typologies and the embedded case study method to analyze one BI and eight representative NVs of the BI. First, we introduce the team anticipations and project anticipations of the anticipatory bases view to develop a two-by-two matrix that accounts for four types of NVs, including star incubation NVs, team incubation NVs, project incubation NVs and ordinary incubation NVs. Furthermore, we find that BIs adopt four differentiated corresponding governance mechanisms for incubation relationships with different types of NVs including a trust mechanism, trust-based contract mechanism, contract-based trust mechanism, and contract mechanism. Finally, based on the governance mechanisms for different types of NVs, we present a framework for the governance mechanism of incubation relationships by BIs. We also discuss the wider implications for both BIs and NVs.