The Performance of University Spin-Offs: The Impact of Entrepreneurial Capabilities and Social Networks of Founding Teams during Start-Ups.

Abstract

Objectives: University spin-offs have increasingly received attention from academia, governments, and policymakers because they not only generate new innovations, productivity, and jobs the regional economies but also significantly improve university productivity and creativity (Hayter, 2013, Urbano and Guerrero, 2013). However, a lack of understanding of the contribution made by a founding team to a spin-off’s performance still remains within current studies. Employing a resource-based view theory and social networks approach, this paper addresses this gap by exploring university spin-offs in Spain. Prior work: University spin-off studies have concentrated on analysing entrepreneurial business models (Ndonzuau et al., 2002, Vohora et al., 2004b, Bower, 2003, Mets, 2010) to understand how the commercialization of research is undertaken to create a university spin-off. University spin-offs were also been analysed from the perspective of a university’s capabilities (Powers and McDougall, 2005), or capabilities and social networks of an established spin-off instead of the founding teams (Walter et al., 2006). Moreover, Vohora et al. (2004a) and Shane (2004) have suggested founders need to build capable teams, which must have entrepreneurial capabilities and qualitative social networks, to create effective university spin-offs. Both entrepreneurial capability and social network theory have been studied in prior entrepreneurship research, but have received less attention within the context of the university spin-offs (Gonzalez-Pernia et al., 2013). Approach: Utilising an internet-based survey, this paper explores entrepreneurial capabilities and social networks of founding teams in Spanish university spin-offs using quantitative data analysis. Basing upon resource-based view theory of Barney (1991) to study entrepreneurial capabilities of the founding teams, the research employ entrepreneurial technology, strategy, human capital, organizational viability, and commercial resources (see Vohora et al., 2004a). To study social networks of a founding team, we employ the conceptual model of Hoang and Antoncic (2003) that divides networks into three components: structure, governance, and content. Results and implications: The results from an examination of the sample of 181 Spanish university spin-offs empirically demonstrate that by exploiting social networks a founding team can improve its entrepreneurial capabilities, which in turn enhance its spin-off’s performance. By employing the work of Vohora et al. (2004a) and Shane (2004), this paper constructs a model in which entrepreneurial capabilities play a mediate role between social networks and spin-off’s performance. Thus, the paper has implications for universities in training and policy development to support spin-off’s activity. Value: This study addresses some fundamental questions to contribute to the theory-based understanding of university spin-offs: How do entrepreneurial capabilities of founding teams influence the performance of university spin-offs? How do social networks of founding teams contribute to the process of the university spin-offs?