Job Machine, Think Tank, or Both – What Makes Corporate Spinoffs Different?

42 Pages Posted: 14 Nov 2013

See all articles by Helmut Fryges

Helmut Fryges

Technopolis Group; University of Tasmania - Australian Innovation Research Centre; Center for European Economic Research (ZEW)

Bettina Mueller

Center for European Economic Research (ZEW)

Michaela Niefert

Center for European Economic Research (ZEW)

Date Written: November 1, 2013

Abstract

One way through which knowledge and technology transfer can take place is through the foundation of new firms by former employees of incumbent private firms. In this paper, we examine whether knowledge transferred from the incumbent causally affect employment growth and post-entry innovation activities of the new firm. We focus on start-ups for which a new idea (a new product, technology, production process or management concept), which the founder developed during her work as an employee, was essential for setting up the new business. These firms are denoted corporate spinoffs. Using data from German start-ups founded in the period from 2005 to 2008, we apply nearest neighbour propensity score matching. We find that corporate spinoffs outperform other start-ups founded by former employees of incumbent private firms that are not based on an essential idea in terms of post-entry innovation activities. However, we cannot show that corporate spinoffs benefit from the transferred idea in terms of employment growth. We conclude that a transferred idea is primarily an input factor and a stimulus for subsequent post-entry innovation activities of corporate spinoffs.

Keywords: knowledge and technology transfer, corporate spinoffs, propensity score matching, KfW/ZEW Start-Up Panel

JEL Classification: L26, L25, O31, C21

Suggested Citation

Fryges, Helmut and Mueller, Bettina and Niefert, Michaela, Job Machine, Think Tank, or Both – What Makes Corporate Spinoffs Different? (November 1, 2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-093, Available at SSRN: https://ssrn.com/abstract=2353827 or http://dx.doi.org/10.2139/ssrn.2353827

Helmut Fryges (Contact Author)

Technopolis Group ( email )

Grosse Seestraße 26
Frankfurt am Main, 60384
Germany

University of Tasmania - Australian Innovation Research Centre ( email )

1 College Road
Sandy Bay TAS, Tasmania 7005
Australia

HOME PAGE: http://www.utas.edu.au/airc

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Bettina Mueller

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

Michaela Niefert

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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