Private Equity and the Innovation Strategies of Entrepreneurial Firms: Empirical Evidence from the Small Business Innovation Research Program

Managerial and Decision Economics, Forthcoming

25 Pages Posted: 10 Sep 2013

See all articles by Albert Link

Albert Link

University of North Carolina (UNC) at Greensboro - Department of Economics

Christopher J. Ruhm

University of Virginia - Frank Batten School of Leadership and Public Policy; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Donald S. Siegel

Arizona State University

Multiple version iconThere are 2 versions of this paper

Date Written: September 8, 2013

Abstract

There is great interest in evaluating the impact of private equity investments on innovation and economic growth. However, there is no direct empirical evidence on the effects of such transactions on the innovation strategies of entrepreneurial firms. We fill this gap by examining a rich project-level data set consisting of entrepreneurial firms receiving Small Business Innovation Research (SBIR) program research awards. We find that SBIR firms attracting private equity investments are significantly more likely to license and sell their technology rights and engage in collaborative research and development agreements. Our results suggest that private equity investments accelerate the development and commercialization of research-based technologies, thus contributing to economic growth. We conclude that both public and private investment have a positive effect on innovation performance.

Keywords: private equity, innovation, entrepreneurship, SBIR

JEL Classification: G24, G34, 031, 033, 038, L26

Suggested Citation

Link, Albert N. and Ruhm, Christopher J. and Siegel, Donald S., Private Equity and the Innovation Strategies of Entrepreneurial Firms: Empirical Evidence from the Small Business Innovation Research Program (September 8, 2013). Managerial and Decision Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2322482 or http://dx.doi.org/10.2139/ssrn.2322482

Albert N. Link

University of North Carolina (UNC) at Greensboro - Department of Economics ( email )

Greensboro, NC 27402-6165
United States
336-334-5146 (Phone)
336-334-4089 (Fax)

Christopher J. Ruhm

University of Virginia - Frank Batten School of Leadership and Public Policy ( email )

235 McCormick Rd.
P.O. Box 400893
Charlottesville, VA 22904-4893
United States
434-924-7581 (Phone)

HOME PAGE: http://batten.virginia.edu/cruhm.html

National Bureau of Economic Research (NBER) ( email )

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IZA Institute of Labor Economics ( email )

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Germany

Donald S. Siegel (Contact Author)

Arizona State University ( email )

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Phoenix, AZ 85004
United States
6024961101 (Phone)

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