Research Universities and Regional High-Tech Firm Start-Up and Exit

By De Silva, Dakshina G.; McComb, Robert | Economic Inquiry, January 2012 | Go to article overview

Research Universities and Regional High-Tech Firm Start-Up and Exit


De Silva, Dakshina G., McComb, Robert, Economic Inquiry


I. INTRODUCTION

During the decade of the 1990s, a significant level of firm start-up activity was observed in the newly emerging high-technology industries. This activity tended to be concentrated in relatively few locations such as Silicon Valley in California, the Route 128 corridor in Boston, and the 1-35 corridor in Texas. As the regional employment dynamism and relatively high incomes associated with these new technology firms were widely coveted by regional policy makers, regional economic development interests focused on initiating or attracting high-tech industrial "clusters" by looking to exploit the presence of correlates. (1) Chief among these correlates has been the presence of a research university or institution, or a broader research complex.

In this article, we seek to estimate the effect of federally funded R&D in universities and related research complexes in Texas on the likelihood of high-technology firm entry and survival. By restricting the analysis to Texas, we control for state-specific conditions across counties that influence the variables of interest and gain fully disclosed access to a highly detailed industry data set at the 6-digit level of the North American Industrial Classification System (NAICS).

Previous researchers have considered the question of the effect of university research on the regional economy. We are, however, unaware of any previously published paper that analyzes hazard rates of firms in terms of geographic proximity to knowledge generators.

As Nelson (1986), Jaffe (1989), Acs, Audretsch, and Feldman (1992, 1994), Acs, Anselin, and Verga (2002) and Fischer and Varga (2003) point out, it is quite plausible that the presence of a research university can make locally specific contributions to the level of commercial innovation in its region. (2) The university provides geographically specific access to resources such as libraries, faculty, and a ready pool of graduates at all levels. Research universities and institutions conduct basic research, that is, create knowledge, with the purpose of diffusing the knowledge they create. New knowledge that spills over most readily into the locality should result in localized private sector innovation. Moreover, universities increasingly seek means by which to facilitate faculty start-ups and to enhance access to university resources to support regional entrepreneurs. (3) Although universities can be the sources of direct spin-offs in the form of startups, this impact seems to be moderate and relatively recent. The Association of University Technology Managers reports that 462 new high-technology companies based on academic discovery were formed in 2004 by 191 institutions, up 23.5% from 2003. (4) This only represents an average of somewhat more than two start-ups per institution. In Texas alone in 2004, there were 787 start-ups in the high-technology activities.

If there is a geographic component to diffusion of knowledge, rapid innovation of new knowledge will enhance the economic value of geographic proximity to the knowledge production location. Moreover, given the publicly funded nature of university research, spillovers may be relatively more available from universities than private sector firms conducting similar R&D. Jaffe (1989) and Jaffe, Trajtenberg, and Henderson (1993) find evidence of localized knowledge spillovers from universities. In particular, they find that the presence of a university positively affects the local or regional level of patent activity. Anselin, Varga, and Acs (2000) find evidence that university spillovers are specific to certain industries. For example, their results suggest the strong presence of spillovers in the case of electronics but not in drugs and pharmaceuticals (at the 2-digit SIC level). Mansfield (1995) also finds evidence that the level of university R&D expenditures and quality of relevant faculty are important to industrial innovation in technology industries (at the statewide level). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Research Universities and Regional High-Tech Firm Start-Up and Exit
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.