How university and industry knowledge interact to determine local entrepreneurship

Abstract

This article discusses and empirically investigates whether and how university knowledge and industry knowledge interact to determine the creation of knowledge-intensive firms (KIFs) in a geographic area. In line with the knowledge spillover theory of entrepreneurship (KSTE), we find that both knowledge types matter for stimulating local entrepreneurship. However, our findings document that university knowledge exerts an effect just in areas where industry knowledge is low. In other words, the two types of knowledge do not generate synergetic gains, but are substitutes.

Keywords:

• new firm creation
• industry knowledge
• university knowledge
• knowledge spillover theory of entrepreneurship

JEL Classification:

• L29
• O33

Notes

¹ The presence of over-dispersion is confirmed by the likelihood-ratio test under the null hypothesis that the over-dispersion coefficient is zero. The null hypothesis is rejected at 1% significance level.

² In the estimation of Equation 1, we standardize all the variables with the exception of dummy variables to ease the interpretation of the results. However, Table 1 reports unstandardized values.

³ The IRR is the ratio at which the dependent variable increases (or decreases) for a one unit increase in the explanatory variable while holding all other variables in the model constant. Since all continuous variables in the model are standardized, a one-unit increase corresponds to a one SD increase.