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Business Partners, Financing, and the Commercialization of Inventions

43 Pages Posted: 24 Jun 2011 Last revised: 17 Jun 2014

Thomas B. Astebro

HEC Paris - Strategy & Business Policy

Carlos J. Serrano

Universitat Pompeu Fabra, Barcelona GSE; Banco de España - Research Department; University of Toronto - Rotman School of Management, RIIB; National Bureau of Economic Research (NBER)

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Date Written: March 2014

Abstract

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.

Keywords: Entrepreneurship, Business Partners, Entrepreneurial finance

JEL Classification: M13, G24, O31, J24

Suggested Citation

Astebro, Thomas B. and Serrano, Carlos J., Business Partners, Financing, and the Commercialization of Inventions (March 2014). Available at SSRN: https://ssrn.com/abstract=1871687 or http://dx.doi.org/10.2139/ssrn.1871687

Thomas B. Astebro (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Carlos J. Serrano

Universitat Pompeu Fabra, Barcelona GSE ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

HOME PAGE: http://www.econ.upf.edu/~cserrano

Banco de España - Research Department ( email )

Alcalá 48
Madrid, 28014
Spain

University of Toronto - Rotman School of Management, RIIB

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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