A Control Group Study of Incubators’ Impact to Promote Firm Survival
AbstractIt is widely unclear as to whether start-up firms supported by publicly-initiated incubator initiatives have higher survival rates than comparable start-up firms that have not received support by such initiatives. This paper contributes to the underlying discussion by performing an empirical analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and contrasting these results with the long-term survival of a control group of 371 comparable non-incubated firms. The analysis covers a 10-year time span. To account for the problem of selection bias, a non-parametric matching approach is applied to identify an appropriate control group. For neither of the five incubator locations we find statistically significant higher survival probabilities for firms located in incubators compared to firms located outside those incubator organizations. For three incubator locations the analysis even reveals statistically significant lower chances of survival for those start-ups having received support by an incubator. We therefore arrive at the conclusion that being located in an incubator – contrasting the widespread rhetoric of policy actors and incubator stakeholders – does not increase the chances of long-term business survival.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Halle Institute for Economic Research in its series IWH Discussion Papers with number 11.
Date of creation: May 2010
Date of revision:
business incubators; firm survival; control group; matching; survival analysis; technology policy;
Other versions of this item:
- Michael Schwartz, 2013. "A control group study of incubators’ impact to promote firm survival," The Journal of Technology Transfer, Springer, vol. 38(3), pages 302-331, June.
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-05-22 (All new papers)
- NEP-ENT-2010-05-22 (Entrepreneurship)
- NEP-SBM-2010-05-22 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Siegel, Donald S & Westhead, Paul & Wright, Mike, 2003. " Science Parks and the Performance of New Technology-Based Firms: A Review of Recent U.K. Evidence and an Agenda for Future Research," Small Business Economics, Springer, vol. 20(2), pages 177-84, March.
- Mariagrazia Squicciarini, 2008. "Science Parks’ tenants versus out-of-Park firms: who innovates more? A duration model," The Journal of Technology Transfer, Springer, vol. 33(1), pages 45-71, February.
- Wagner, S. & Cockburn, I., 2010.
"Patents and the survival of Internet-related IPOs,"
Elsevier, vol. 39(2), pages 214-228, March.
- Ensley, Michael D. & Pearson, Allison W. & Amason, Allen C., 2002. "Understanding the dynamics of new venture top management teams: cohesion, conflict, and new venture performance," Journal of Business Venturing, Elsevier, vol. 17(4), pages 365-386, July.
- Fukugawa, Nobuya, 2006. "Science parks in Japan and their value-added contributions to new technology-based firms," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 381-400, March.
- Michael Schwartz & Maximilian G�thner, 2009. "A multidimensional evaluation of the effectiveness of business incubators: an application of the PROMETHEE outranking method," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 27(6), pages 1072-1087, December.
- Scott Shane & Toby Stuart, 2002. "Organizational Endowments and the Performance of University Start-ups," Management Science, INFORMS, vol. 48(1), pages 154-170, January.
- Colombo, Massimo G. & Delmastro, Marco, 2002. "How effective are technology incubators?: Evidence from Italy," Research Policy, Elsevier, vol. 31(7), pages 1103-1122, September.
- Sean Hackett & David Dilts, 2008. "Inside the black box of business incubation: Study B—scale assessment, model refinement, and incubation outcomes," The Journal of Technology Transfer, Springer, vol. 33(5), pages 439-471, October.
- Almus, Matthias & Nerlinger, Eric A, 1999. " Growth of New Technology-Based Firms: Which Factors Matter?," Small Business Economics, Springer, vol. 13(2), pages 141-54, September.
- Phan, Phillip H. & Siegel, Donald S. & Wright, Mike, 2005. "Science parks and incubators: observations, synthesis and future research," Journal of Business Venturing, Elsevier, vol. 20(2), pages 165-182, March.
- Peter Bearse, 1998. "A Question of Evaluation: NBIA's Impact Assessment of Business Incubators," Economic Development Quarterly, , vol. 12(4), pages 322-333, November.
- Rothaermel, Frank T. & Thursby, Marie, 2005. "Incubator firm failure or graduation?: The role of university linkages," Research Policy, Elsevier, vol. 34(7), pages 1076-1090, September.
- Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
- Harald Strotmann, 2007. "Entrepreneurial Survival," Small Business Economics, Springer, vol. 28(1), pages 87-104, January.
- Michael Schwartz, 2009. "Beyond incubation: an analysis of firm survival and exit dynamics in the post-graduation period," The Journal of Technology Transfer, Springer, vol. 34(4), pages 403-421, August.
- Maximilian Zedtwitz & Rosa Grimaldi, 2006. "Are Service Profiles Incubator-Specific? Results from an Empirical Investigation in Italy," The Journal of Technology Transfer, Springer, vol. 31(4), pages 459-468, 07.
- Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
- Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
- Slavo Radosevic & Marat Myrzakhmet, 2006. "Between Vision And Reality: Promoting Innovation Through Technoparks In Kazakhstan," Working Papers 66, CENTRE FOR THE STUDY OF ECONOMIC AND SOCIAL CHANGE IN EUROPE,School of Slavonic and East European Studies,University College London (SSEES,UCL).
- Yang, Chih-Hai & Motohashi, Kazuyuki & Chen, Jong-Rong, 2009. "Are new technology-based firms located on science parks really more innovative?: Evidence from Taiwan," Research Policy, Elsevier, vol. 38(1), pages 77-85, February.
- Zoltan J. Acs & Catherine Armington & Ting Zhang, 2007. "The determinants of new-firm survival across regional economies: The role of human capital stock and knowledge spillover," Papers in Regional Science, Wiley Blackwell, vol. 86(3), pages 367-391, 08.
- Cefis, Elena & Marsili, Orietta, 2006. "Survivor: The role of innovation in firms' survival," Research Policy, Elsevier, vol. 35(5), pages 626-641, June.
- Richard Ferguson & Christer Olofsson, 2004. "Science Parks and the Development of NTBFs-- Location, Survival and Growth," The Journal of Technology Transfer, Springer, vol. 29(1), pages 5-17, 01.
- P.A. Geroski & José Mata & Pedro Portugal, 2003.
"Founding Conditions and the Survival of New Firms,"
w200301, Banco de Portugal, Economics and Research Department.
- Rudy Aernoudt, 2004. "Incubators: Tool for Entrepreneurship?," Small Business Economics, Springer, vol. 23(2), pages 127-135, 09.
- Catarina Roseira & Carla Ramos & Francisco Maia, 2014. "Understanding Incubator Value – A Network Approach to University Incubators," FEP Working Papers 532, Universidade do Porto, Faculdade de Economia do Porto.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hubert Gabrisch).
If references are entirely missing, you can add them using this form.