Performance differences between academic spin-offs and non-academic start-ups: A comparative analysis using a non-parametric matching approach

How do academic spin-offs perform relative to other innovative start-ups? What are the factors that influence differences in their performance? Or do such performance differences exist at all? This study provides unique comparative evidence on the early performance of both types of entrepreneurial venturing. We apply non-parametric propensity score matching to address the potentially confounding influence of the endogeneity of academics’ decision whether and when to engage in firm founding. Utilizing archival and survey data on 128 academic spin-offs and an equivalently matched group of 128 non-academic innovative startups in Germany, we find that firms involving academic founders experience a lower risk of default and achieve higher levels of innovative output in the first years of business operation.
Results however do not suggest significant differences with respect to job-creation early after start-up. Moreover, the two sets of firms benefit differently from their initial resource endowment and strategic decisions. In particular, technological resources the founders contribute to their new venture and the market strategy at founding emerge as potential drivers of performance differences between academic spin-offs and other technology-based start-ups, whereas financial resources and founders’ entrepreneurial human capital do not show differential effects.