One way through which knowledge and technology transfer can take place is through the foundation of new firms by former employees of incumbent private firms. In this paper, we examine whether knowledge transferred from the incumbent causally affect employment growth and post-entry innovation activities of the new firm. We focus on start-ups for which a new idea (a new product, technology, production process, or management concept), which the founder developed during her work as an employee, was essential for setting up the new business. These firms are denoted corporate spin-offs. Using data from German start-ups founded in the period from 2005 to 2008, we apply nearest-neighbour propensity score matching. We find that corporate spin-offs outperform other start-ups founded by former employees of incumbent private firms that are not based on an essential idea in terms of post-entry innovation activities. However, we cannot show that corporate spin-offs benefit from the transferred idea in terms of employment growth. We conclude that a transferred idea is primarily an input factor and a stimulus for subsequent post-entry innovation activities of corporate spin-offs.

Item Type:	Refereed Article
Keywords:	panel data; corporate spin-offs; knowledge and technology transfer
Research Division:	Economics
Research Group:	Applied Economics
Research Field:	Industry Economics and Industrial Organisation
Objective Division:	Economic Framework
Objective Group:	Management and Productivity
Objective Field:	Technological and Organisational Innovation
Author:	Fryges, HR (Dr Helmut Fryges)
ID Code:	88601
Year Published:	2014
Web of Science® Times Cited:	2
Deposited By:	Australian Innovation Research Centre
Deposited On:	2014-02-08
Last Modified:	2018-03-20
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