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University Invention, Entrepreneurship, and Start-Ups
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Short Description: Conference on Academic Science and Entrepreneurship: Dual Engines of Growth?, the .... TTO, the inventor, an established firm, and an investor/entrepreneur. ...
Content Inside: University Invention, Entrepreneurship, and Start-Ups Celestine O. Chukumba and Richard A. Jensen Department of Economics and Econometrics The University of Notre Dame May 20, 2005 Abstract We examine the commercialization of university inventions in li- censing to both start-up firms and established firms, and seek to de- termine when licensing to start-ups is more likely. We construct a theoretical model that predicts start-ups are more likely if their op- portunity cost of development and commercialization is lower or if the technology transfer officer's (TTO) opportunity cost of searching for a partner among established firms is higher. Using data from the Associa- tion of University Technology Managers, the National Venture Capital Association Yearbook, and the National Research Council, we find that inventor quality and measures of past TTO success (age, the number of disclosures, gross royalties) are all positively and significantly related to the number of licenses to both start-ups and established firms. How- ever, we also find that start-up activity is positively and significantly related to the S&P 500, but negatively and significantly related to the interest rate and rate of return to venture capital. We thank participants in the NBER Summer Institute Pre-Conference and the NBER Conference on Academic Science and Entrepreneurship: Dual Engines of Growth?, the Notre Dame Economics and Econometrics Brownbag, and the Fourth REER Conference, B.J. Lee, Josh Lerner, Nelson Mark, Larry Marsh, Suzanne Scotchmer, Scott Shane, Jim Sullivan, Jerry Thursby, Marie Thursby, Chris Waller, and Arvids Ziedonis for helpful comments and discussions. We also thank the TTOs, university administrators, and licensing consultants whose willingness to talk to us about their licensing experience was helpful in formulating our theoretical model. 1
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