The impact of institution quality, cluster strength and TLO licensing capacity on the rate of academic staff spin-offs

This paper examines the spawning of new company founders' from 124 leading U.S. academic institutions, using a unique database. We examine both local and non-local spin-offs of academic faculty members. Accordingly, the rate of spawning is positively affected by the institution quality, the strength of the local entrepreneurial cluster in the region where the institution is located, and the share of R&D expenditure financed by the federal government. On the other, hand the effectiveness of the university technology licensing office (measured by license revenues per R&D expenditure) has a negative impact on the rate of academic spawning. Moreover, we find evidence that after controlling for the entire institution rank, the rank of the business school has a positive and significant impact on the institution spawning rate. When comparing the local spin-offs to non-local spin-offs we find that 42% of faculty spin-offs are created in the region of the academic institution. This finding contrasts the common notion that most of the academic spin-offs are local. Not surprisingly, we find that local cluster culture and local availability of VC has very limited impact on non-local academic spin-offs. Moreover, institution R&D expenditure and sources of R&D finance has low impact on non-local academic spin-offs.