University Entrepreneurship and Professor Privilege

36 Pages Posted: 26 Apr 2012

See all articles by Erika Färnstrand Damsgaard

Erika Färnstrand Damsgaard

National Institute of Economic Research; Research Institute of Industrial Economics (IFN)

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: April 12, 2012

Abstract

This paper analyzes how institutional differences affect university entrepreneurship. We focus on ownership of faculty inventions, and compare two institutional regimes; the US and Sweden. In the US, the Bayh Dole Act gives universities the right to own inventions from publicly funded research, whereas in Sweden, the professor privilege gives the university faculty this right. We develop a theoretical model and examine the effects of institutional differences on modes of commercialization; entrepreneurship or licenses to established firms, as well as on probabilities of successful commercialization. We find that the US system is less conducive to entrepreneurship than the Swedish system if established firms have some advantage over faculty startups, and that on average the probability of successful commercialization is somewhat higher in the US. We also use the model to perform four policy experiments as suggested by recent policy debates in both countries.

Keywords: entrepreneurship, professor privilege, commercialization, startup

JEL Classification: L24, L26, O31, O38

Suggested Citation

Färnstrand Damsgaard, Erika and Thursby, Marie C., University Entrepreneurship and Professor Privilege (April 12, 2012). IFN Working Paper No. 909, Available at SSRN: https://ssrn.com/abstract=2045957 or http://dx.doi.org/10.2139/ssrn.2045957

Erika Färnstrand Damsgaard (Contact Author)

National Institute of Economic Research ( email )

Box 3116
Stockholm, SE-103 62
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Marie C. Thursby

Georgia Institute of Technology - Strategic Management Area ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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