Creation process of research-based spin-offs: an empirical analysis

Abstract

University spin-off has increasingly become an interesting concern in contemporary life. This represented in both the increase in the number of the new ventures over past decades and their contributions in many economies. From 1996 to 2001, 554 spin-offs were created in The United Kingdom (Wright, Vohora, & Lockett, 2002). In The United States, between 1980 and 2000, only 3,376 new spin-offs were established, but these companies, on average, achieved extreme success (Pressman, 2001). By analyzing new spin-offs that entered the American market from 1980 to 1986, Shane and Stuart (2002) found that 18 percent of those companies were from the Massachusetts Institute of Technology (MIT). These spin-offs obtained initial public offering (IPO) over 257 times higher than the average. Furthermore, a university spin-off represents an important firm formation as an economically powerful subset of high-technology start-ups in many industries such as biotechnology, chemistry, and information technology. Many scholars have studied the success of those spin-offs through the influences of internal-factor and external-factor approaches. Although an entrepreneurship process comprises both foundation and development phases, most of the scholars have focused on the later stage. Several scholars have studied the influences of a new firm's capabilities on its performance, but have omitted to show how social capital and entrepreneurial capabilities of the entrepreneurial teams contribute to entrepreneurship processes. In this study, we analyzed the influences of the social networks and the capabilities of entrepreneurial teams on the success of spin-off creations and on the current performance of the firms. The results revealed direct effects of entrepreneurial capabilities and indirect influences of social networks on the spin-off's performance, as well the contributions of social elements on the spin-off creations. These lead us to understand how the pre-established factors of a firm determine its market entry and performance.