Marco Baudino (Université de Nice Cote d’Azur)

Technology incubators and startup innovation dynamics: New evidence from a quasi-natural experimental design

Abstract. Are technology incubators effective for boosting new venture innovation dynamics? If so, via what mechanisms do knowledge-based assets flow from universities to incubator firms? Despite the relevance of these questions, the findings in the literature remain inconclusive. We try to resolve this empirically by exploiting a rich set of proprietary data on incubator startups from 2009 to 2019, and employing a rigorous methodology based on a quasi-natural experimental design. Drawing upon the absorptive capacity framework of the firm, we focus on the supply side of the knowledge transfer mechanism. Specifically, we posit that venture founders’ backgrounds play a crucial role in the firm’s assimilation of the knowledge flows from academic institutions and their successful application in terms of innovation outcomes. Overall, we find evidence that in the process of knowledge transfer, startups established by STEM-educated founders benefit most from incubator participation due to their greater probability of increased R&D and patenting activities compared to ventures whose founders’ experience is a mix of technical and business education. At the same time, we detect for STEM startupsgap between innovation process and successful commercialization of the invention. Our findings have implications for policy in terms of local support for technology-based startups.