The effectiveness of entrepreneurial universities at creating surviving firms

Purpose - The purpose of this paper is to explore the survival of university spin-offs (USOs) in Spain. First, the survival rates of USOs are compared with those of a group of similar firms. Second, the firm-specific characteristics of surviving USOs are compared with those of failed USOs. Design/methodology/approach - The study is based on two subsamples consisting of 469 USOs and 469 non-USOs. A matching procedure is used for identifying a valid control group that allows for an outcome comparison between USOs and non-USOs. A longitudinal data set (2000-2010) is constructed, combining data regarding firm-specific characteristics and patent activity. The survival rates of both USOs and non-USOs are described first, and then, the firm-specific characteristics of the surviving USOs are discussed and compared with those of the failed USOs. Findings - The authors find that the survival rates of the USOs are slightly lower than those of the non-USOs. In addition, the failed USOs have a longer average life span than the failed non-USOs. Finally, the data show that the surviving USOs are more likely to have venture capital investors, exports and patents than the failed USOs. Research limitations/implications - This study carries out an explanatory analysis of the survival of Spanish USOs. As the results showed no significant differences between the characteristics of the surviving USOs and those that failed, except for subtle differences in the profiles of the two groups, it is necessary to analyse the underlying causes of this situation. Practical/implications - In many countries, large amounts of public funds have been invested in the creation of USOs. This policy only makes sense if these firms increase the business value and create jobs. The support of USOs with a low expectation of survival or economic viability opens a debate on the amount of public funds invested in these firms. In the current context, funding obtained by these companies could be considered to drain resources from those projects that really deserve to be targeted. Originality/value - The creation of USOs has become a mainstay of universities’ entrepreneurship strategies. Analysing USOs’ survival is therefore crucial for understanding the contribution of entrepreneurial universities to society. Survival is not another measure of this performance, but it is a pre-condition for university-based entrepreneurship to have an effect on society.