Working Paper: NBER ID: w17980
Authors: Erika Farnstrand Damsgaard; Marie C. Thursby
Abstract: This paper analyzes how institutional differences affect university entrepreneurship. We focus on ownership of faculty inventions, and compare two institutional regimes; the US and Sweden. In the US, the Bayh Dole Act gives universities the right to own inventions from publicly funded research, whereas in Sweden, the professor privilege gives the university faculty this right. We develop a theoretical model and examine the effects of institutional differences on modes of commercialization; entrepreneurship or licenses to established firms, as well as on probabilities of successful commercialization. We find that the US system is less conducive to entrepreneurship than the Swedish system if established firms have some advantage over faculty startups, and that on average the probability of successful commercialization is somewhat higher in the US. We also use the model to perform four policy experiments as suggested by recent policy debates in both countries.
Keywords: university entrepreneurship; technology transfer; Bayh-Dole Act; professor privilege; commercialization
JEL Codes: O30; O33; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Institutional differences (US vs. Sweden) (I24) | University entrepreneurship (M13) |
| US system is less conducive to entrepreneurship (P12) | Startup activity (L26) |
| Increased inventor revenues (O39) | Higher startup rates (M13) |
| Probability of successful commercialization (US) (O36) | Probability of successful commercialization (Sweden) (O36) |
| Search costs (G19) | Commercialization through startups (M13) |
| Search costs (G19) | Probability of successful commercialization (O36) |