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Small Business Economics

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01-08-2014

The origin of spin-offs: a typology of corporate and academic spin-offs

Authors: Helmut Fryges, Mike Wright

Published in: Small Business Economics | Issue 2/2014

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Abstract

We provide a typology of corporate and academic spin-off types, distinguishing spin-offs involving new ventures from those that concern existing activities. We summarize the papers published in this special issue, relating them to the typology we develop. We conclude by developing an agenda for further research on spin-offs.

next article The impact of local and external university knowledge on the creation of knowledge-intensive firms: evidence from the Italian case

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In this paper, we use the term “university” to refer to all kind of publically funded, not-for-profit research organizations. In particular, this includes extra university research institutes.

Merton (1942, p. 270) outlines "four sets of institutional imperatives—universalism, communism, disinterestedness, organized scepticism—[that] comprise the ethos of modern science." See also Macfarlane and Cheng (2008) for a recent discussion of Merton’s norms.

The aforementioned legislative reforms and mechanisms of public support are not exclusively related to academic spin-offs that involve the transition of a university researcher from the university sector to the private sector. Other channels of university knowledge commercialization that are targeted by legislation and various public support mechanisms include university–industry partnerships, science parks, patenting, and licensing (see Phan and Siegel 2006, for an overview). Moreover, founders of alumni start-ups may likewise benefit from entrepreneurship education.

Corporate spin-offs are usually regarded as new firms that spun off from for-profit private firms. However, the concept of (entrepreneurial) corporate spin-offs does theoretically not exclude start-ups that are based on ideas emanating from state-owned companies. Although the business idea developed for example by an engineer working for a state-owned company might be similar to an idea developed in a for-profit private firm, the parent–spin-off relationship will be different. For instance, it is unlikely that the state-owned parent company will hold a share in the corporate spin-off or will provide any other kind of financial support.

Van de Velde et al. (2007) point out the employee’s wish to become self-employed and to work on an independent basis as a motivation for creating a corporate spin-off. However, the aspiration to become self-employed usually also coincides with the recognition of an entrepreneurial opportunity.

In contrast, Ito (1995) defines a corporate spin-off as a firm with a parent’s partial ownership that ranges between more than 0 and <100 %.

We thank Anna Lejpras and Andreas Stephan for pointing this out in a personal communication.

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Title: The origin of spin-offs: a typology of corporate and academic spin-offs
Authors: Helmut Fryges
Mike Wright
Publication date: 01-08-2014
Publisher: Springer US
Published in: Small Business Economics / Issue 2/2014
Print ISSN: 0921-898X
Electronic ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-013-9535-3

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