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Does Academic Entrepreneurship Pay?

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  • Braunerhjelm, Pontus

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Broström, Anders

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Åstebro, Thomas

    (Department of Strategy HEC Paris)

Abstract

Various policies have been devised to stimulate the creation of spin-offs from universities by academics. But we still do not know whether it is privately beneficial for academics to start new businesses. To address this question we compile total earnings for the universe of 478 individuals aged 60 or less working at Swedish universities who quit to become full-time entrepreneurs between 1999 and 2008. Using tax filings we record all possible earnings including wages, business income, dividends and capital gains. There are very few full-time academic entrepreneurs. Earnings are similar before and after becoming an entrepreneur and dividends and capital gains are inconsequential. But the income risk is more than three times higher in entrepreneurship. Entrepreneurship for academics appears a gradual process and quite episodic. Little explains entrepreneurial earnings except prior wage and forming a sole proprietorship.

Suggested Citation

  • Braunerhjelm, Pontus & Broström, Anders & Åstebro, Thomas, 2012. "Does Academic Entrepreneurship Pay?," Working Paper Series in Economics and Institutions of Innovation 289, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0289
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    Cited by:

    1. Francesco Campanella & Maria Della Peruta & Manlio Del Giudice, 2013. "The Role of Sociocultural Background on the Characteristics and the Financing of Youth Entrepreneurship. An Exploratory Study of University Graduates in Italy," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 4(3), pages 244-259, September.
    2. Dorner, Matthias & Fryges, Helmut & Schopen, Kathrin, 2017. "Wages in high-tech start-ups – Do academic spin-offs pay a wage premium?," Research Policy, Elsevier, vol. 46(1), pages 1-18.
    3. Andrea Asoni & Tino Sanandaji, 2016. "Identifying the effect of college education on business and employment survival," Small Business Economics, Springer, vol. 46(2), pages 311-324, February.
    4. Fritsch, Michael & Kritikos, Alexander S. & Pijnenburg, Katharina, 2013. "Business Cycles, Unemployment and Entrepreneurial Entry: Evidence from Germany," IZA Discussion Papers 7852, Institute for the Study of Labor (IZA).
    5. Hårsman, Björn & Mattsson, Lars-Göran & Hovsepyan, Vardan, 2017. "The income return to entrepreneurship – theoretical model and outcomes for Swedish regions," Working Paper Series in Economics and Institutions of Innovation 463, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    6. Sánchez-Pérez, Manuel & Bourlakis, Michael, 2014. "Absorptive Capability and Knowledge Tacitness in the Transfer of Knowledge in the Agrifood Cluster of the Southeast of Spain," 2014 International European Forum, February 17-21, 2014, Innsbruck-Igls, Austria 199376, International European Forum on Innovation and System Dynamics in Food Networks.
    7. Hayter, Christopher S., 2016. "Constraining entrepreneurial development: A knowledge-based view of social networks among academic entrepreneurs," Research Policy, Elsevier, vol. 45(2), pages 475-490.
    8. Andreas Stephan, 2014. "Are public research spin-offs more innovative?," Small Business Economics, Springer, vol. 43(2), pages 353-368, August.

    More about this item

    Keywords

    academic entrepreneurship; earnings; Sweden;

    JEL classification:

    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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