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University Invention, Entrepreneurship, and Start-Ups

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  • Celestine Chukumba
  • Richard Jensen

Abstract

This paper develops a game-theoretic model that predicts when a university invention is commercialized in a start-up firm rather than an established firm. The model predicts that university inventions are more likely to occur in start-ups when the technology transfer officers (TTOs) search cost is high, the cost of development or commercialization is lower for a start-up, or the inventor's effort cost in development is lower in a start-up. We test the theory using data from the Association of University Technology Managers, the National Research Council, and the National Venture Capital Association. Licensing is more likely in general, and especially so in start-ups, by universities with higher quality engineering faculty and older TTOs. Start-ups are more likely by universities in states with larger levels of venture capital. TTO size has no effect on start-ups, but does increase licenses. Conversely, universities that earn greater licensing royalties have fewer start-ups but more licenses. The number of start-ups is decreasing in the interest rate, increasing in the S&P 500, and unaffected by levels of industrial research funding and the presence of a medical school. All of these results are consistent with the predictions of our theory.

Suggested Citation

  • Celestine Chukumba & Richard Jensen, 2005. "University Invention, Entrepreneurship, and Start-Ups," NBER Working Papers 11475, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:11475
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    References listed on IDEAS

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    1. Heidrun C. Hoppe & Emre Ozdenoren, 2002. "Intermediation in Innovation," CIG Working Papers FS IV 02-11, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. Levin, Sharon G & Stephan, Paula E, 1991. "Research Productivity over the Life Cycle: Evidence for Academic Scientists," American Economic Review, American Economic Association, vol. 81(1), pages 114-132, March.
    3. Jerry G. Thursby & Marie C. Thursby, 2004. "Are Faculty Critical? Their Role in University-Industry Licensing," Contemporary Economic Policy, Western Economic Association International, vol. 22(2), pages 162-178, April.
    4. Richard A. Jensen & Jerry G. Thursby & Marie C. Thursby, 2003. "The Disclosure and Licensing of University Inventions," NBER Working Papers 9734, National Bureau of Economic Research, Inc.
    5. Hellmann, Thomas, 2007. "The role of patents for bridging the science to market gap," Journal of Economic Behavior & Organization, Elsevier, vol. 63(4), pages 624-647, August.
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    Citations

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    Cited by:

    1. Richard Jensen, 2012. "University Startups and Entrepreneurship: New Data, New Results," Working Papers 009, University of Notre Dame, Department of Economics, revised Jul 2012.
    2. Hewitt-Dundas, Nola, 2012. "Research intensity and knowledge transfer activity in UK universities," Research Policy, Elsevier, vol. 41(2), pages 262-275.
    3. Nobuya Fukugawa, 2016. "Knowledge creation and dissemination by Kosetsushi in sectoral innovation systems: insights from patent data," Scientometrics, Springer;Akadémiai Kiadó, vol. 109(3), pages 2303-2327, December.
    4. Rajeev Goel & Devrim Göktepe-Hultén & Rati Ram, 2015. "Academics’ entrepreneurship propensities and gender differences," The Journal of Technology Transfer, Springer, vol. 40(1), pages 161-177, February.
    5. Elfenbein, Daniel W., 2007. "Publications, patents, and the market for university inventions," Journal of Economic Behavior & Organization, Elsevier, vol. 63(4), pages 688-715, August.
    6. Paul Swamidass, 2013. "University startups as a commercialization alternative: lessons from three contrasting case studies," The Journal of Technology Transfer, Springer, vol. 38(6), pages 788-808, December.
    7. Rajeev Goel & Devrim Göktepe-Hultén, 2013. "Nascent entrepreneurship and inventive activity: a somewhat new perspective," The Journal of Technology Transfer, Springer, vol. 38(4), pages 471-485, August.

    More about this item

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • 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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