University Knowledge Spillovers & regional start-up rates

This chapter investigates how regional start-up rates in the knowledge-intensive services and high-tech industries are influenced by knowledge spillovers from both universities and firm-based R&D activities. Integrating insights from economic geography and organizational ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge-intensive industries. Using multilevel data of all knowledge-intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that knowledge spillovers from universities and firm-based R&D strongly affect the start-up rates for both high-tech firms and knowledge-intensive services firms. Further, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of university educated individuals and the political regulatory regime within the municipality than start-ups in high-tech industries. This suggests that knowledge-intensive service-start-ups are more susceptible to both demand-side and supply-side context than is the case for high-tech start-ups in general. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably academic institutions, such as universities that contribute to knowledge-intensive start-ups.

Related content: Working Paper No. 230

Hellerstedt, K., Wennberg, K. & Fredriksen, L. (2014). “University Knowledge Spillovers & regional start-up rates: Supply and Demand-Side Factors.” In Corbett, A. C., Siegel, D. S. & Katz, J. A. (Eds.), Advances in Entrepreneurship, Firm Emergence and Growth: Vol. 16. Academic Entrepreneurship: Creating An Entrepreneurial Ecosystem (pp. 137-168). Bingley, UK: Emerald Group Publishing Limited.