Business Partners, Financing, and the Commercialization of Inventions
Thomas B. Astebro
HEC Paris - Strategy & Business Policy
Carlos J. Serrano
Universitat Pompeu Fabra, Barcelona GSE; University of Toronto - Rotman School of Management, RIIB; National Bureau of Economic Research (NBER)
June 1, 2011
This paper studies the effect of business partners on the commercialization of invention-based ventures, and it assesses the relative importance of the complementary human and social capital, and financial capital these partners may add to the original inventor-entrepreneur. Projects run by partnerships were five times more likely to reach commercialization, and they had mean revenues approximately ten times greater than projects run by solo-entrepreneurs. These gross differences may be due both to partners impacting business success and to selection. After controlling for selection effects and observed/unobserved heterogeneity, the smallest estimate of partner human/social capital approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean. The results indicate that the decision to form a business partnership is an important determinant of the large heterogeneity in entrepreneurial success, and that obtaining human and social capital accounts for a large portion of this effect.
Number of Pages in PDF File: 44
Keywords: Entrepreneurship, Business Partners, Entrepreneurial finance
JEL Classification: M13, G24, O31, J24working papers series
Date posted: June 24, 2011 ; Last revised: April 30, 2013
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