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A control group study of incubators’ impact to promote firm survival

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  • Michael Schwartz

Abstract

It 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 a large-scale matched-pairs analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and 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 reveals statistically significant lower chances of survival for those start-ups receiving support by an incubator. The empirical results, therefore, raise some doubts regarding the impacts of incubation on long-term firm survival. Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • 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.
    • Handle: RePEc:kap:jtecht:v:38:y:2013:i:3:p:302-331
    DOI: 10.1007/s10961-012-9254-y
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    More about this item

    Keywords

    Incubation; Business incubators; Firm survival; Hazard rates; Control group; Technology policy; L26; O38;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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