The Impact of Founders’ Professional Education Background on the Adoption of Open Science by For-Profit Biotechnology Firms

Abstract

This paper investigates the effect of founders’ professional-education background on the adoption of an open-science technology strategy, using a sample of 512 young biotechnology firms. After controlling for founders’ prior work experience and other organizational and environmental factors, I find that firms with proportionally more Ph.D. - holding entrepreneurs on the founding team have a higher probability of adopting open science. In addition, founders’ educational background can mitigate the constraint of organizational environments on strategy. A crowded technological niche provides a more challenging environment for firms for implementing open science, due to higher scooping risks. The deterring effect, however, of such a high-risk environment is smaller among firms founded by proportionally more Ph.D. - holding entrepreneurs. There is also some evidence of a stronger effect of founders’ educational background on open science in an institutional environment in which open science has yet to become the industry norm. This finding is consistent with and complements the growing body of research that emphasizes the importance of entrepreneurial background in developing knowledge about new venture strategy and structure.