Business Partners, Financing, and the Commercialization of Inventions
Thomas B. Astebro
HEC Paris - Strategy & Business Policy
Carlos J. Serrano
Universitat Pompeu Fabra, Barcelona GSE; Bank of Spain - Research Department; University of Toronto - Rotman School of Management, RIIB; National Bureau of Economic Research (NBER)
This paper studies the effect of business partners on the commercialization of invention-based ventures, and it assesses the relative importance of the complementary skills, contacts, and financial capital that these partners may add to the original inventor-entrepreneur. Projects run by partnerships were five times as likely to reach commercialization as those without partnerships, and they had mean revenues approximately ten times as great as projects run by solo entrepreneurs. These gross differences may be due both to partners impacting business success that is, who the particular partners were, and to selection of the type of project or of whom to select as a partner. After controlling for selection effects and observed/unobserved heterogeneity, the smallest estimate of partners’ skills and contacts approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean. Our findings suggest that a critical policy option to increase commercialization rates and revenues for early-stage businesses is to support the market for finding skilled partners.
Number of Pages in PDF File: 43
Keywords: Entrepreneurship, Business Partners, Entrepreneurial finance
JEL Classification: M13, G24, O31, J24
Date posted: June 24, 2011 ; Last revised: June 17, 2014
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