What Explains the Survival Gap of Pushed and Pulled Corporate Spin-offs?

Based on the PhD thesis of Vera Rocha this article has been published in Economics Letters.

Abstract: Unconditionally, pushed spin-offs are found to survive longer than their pulled counterparts. Using matched employer-employee data and novel multivariate decomposition techniques, we show that pushed spin-offs’ relative survival advantage is mostly explained by their larger human capital endowments at entry.

Find the article here.


Innovations and spin-offs from universities: How can universities fulfill their social responsibility?

Mirjam van Praag gives the key note of the 19th Annual Interdisciplinary Conference on Entrepreneurship and Innovation, which is held under the heading Innovations and spin-offs from universities: How can universities fulfill their social responsibility? at University of Kassel 8-9 October 2015.

Read more about the conference http://www.gforum2015.de/en/

Book out on Intellectual Property Right Management

In a new book published in collaboration with Lars Alkjærsig (DTU) and Karin Beukel (Copenhagen University), Toke Reichstein addresses one of the major challenges of young, small and medium sized firms: How to navigate through the jungle of IP tools, practices and conduct. Intellectual Property Rights Management explores how the entire toolbox of intellectual property (IP) protection and management are successfully combined and how firms generate value from IP. In particular, this book provides a framework of archetypes which firms will be able to self-identify with and which will allow companies to focus on the IP and IP Management issues most relevant to them. By doing so, the authors offer further insights as to the use of IP and IP management practices across firms. By looking at empirical data covering the population of firms, the findings not only pertain to large organization but also reflect the practices and operations that reside in SMEs. This volume also utilizes labor market and firm data to determine whether there is a definitive relationship between IP and economic performance on the firm level. Coupled with qualitative analysis of 50+ interviews with managers of smal and medium sized firms, this book aims to map different approached to IP and understand how the different approaches may or may not matter for the firms further development. The anecdotal evidence coupled with register analysis offers new insights aimed at assisting firms in making the right choices with regard to IP issues.

Supportive website: http://boostyourprofit.org/ Book at Publisher: http://www.palgrave.com/page/detail/intellectual-property-rights-management-lars-alkaersig/?isb=9781137469526

Best paper price at DRUID

At this years DRUID conference, the best paper price was awarded to Maria Halbinger (Baruch College, New York) and Toke Reichstein (INO, CBS). Their paper, Entrepreneur’s Social Skills: Experience, Hackers and Haikus, is an investigation into how specific entrepreneurial social skills may be a precipitator of entrepreneurial experience.


Utilizing computational linguistics on written haiku poems to identify social skills among more than 450 hackers and makers, we build a theory of conscientiousness, social awareness and social influence and their association with entrepreneurial experience defined by number of times the individual has been involved in new firm establishment.

We tie these individual qualities to the individual’s entrepreneurial tendencies by considering three core activities of entrepreneurship: information gathering, translation of information into business opportunities, and securing resources.

We distinguish theoretically between establishment of the first start-up (entrepreneurship) and the repeated transitioning into entrepreneurship (entrepreneurial experience). Entrepreneurial experience is found to be positively associated with self-confidence and social awareness while negatively associated with social influence.

Qualitative scrutiny of the Haiku Poems provides further support for the findings on social influence and bestows added confidence in the use of computational linguistics on Haiku poems for addressing research questions on social skills. All results are robust with regard to generic personality traits.

Mirjam van Praag gives the Swedish Schumpeter Lecture 2015

On 16 September Mirjam van Praag will give the 2015 Swedish Schumpeter Lecture under the heading: The Potential of Fostering More (Schumpeterian) Entrepreneurship. The lecture will examine: Can you really teach people to become entrepreneurs or is it more or less a genetic matter whether or not people will start up ventures? And if the environment has a role, what kind of instruments do we have to promote more or better entrepreneurship? And what kind of skills and behavior are characteristic of (successful) entrepreneurs? So, what and how should  (prospective) entrepreneurs learn?

Swedish Entrepreneurship Forum is the leading network organization for generating and transferring policy relevant research in the field of entrepreneurship and small enterprise development.

Read more: http://eng.entreprenorskapsforum.se/activities/swedish-schumpeter-lecture-2015-mirjam-van-praag/

Where Do Spin-Offs Come From?: Start-Up Conditions and the Survival of Pushed and Pulled Spin-Offs

Vera Rocha has contributed to the book Entrepreneurship, Human Capital, and Regional Development.

Although previous research shows that spin-offs are among the most successful firms in an industry, outperforming de novo entrants, few studies consider the heterogeneity of corporate spin-offs in relation to firm performance or survival. Against this backdrop, the objective of the present chapter is twofold. First, this study aims to add to our knowledge on the relationship between spin-off type and firm survival using a comprehensive matched employer-employee dataset from Portugal. After controlling for their different start-up conditions—namely regarding initial hiring schemes, business-owners’ characteristics, and the industrial and geographical relatedness to the parent firm—and a set of firm, industry, and macroeconomic characteristics, we found no significant survival differences between opportunity and necessity spin-offs. Second, based on the findings, we suggest that necessity spin-offs have not received the attention they deserve. Not only do necessity spin-offs perform an important role in the dynamics of competitive markets, by offering a possible solution for recently displaced individuals, but they also create new jobs and help to prevent the depreciation of workers’ human capital.

Read the chapter here: http://link.springer.com/chapter/10.1007%2F978-3-319-12871-9_6

The Baton of Entrepreneurship

Motivated by the need for understanding the differences in the way we perceive and think about entrepreneurship, the CBS Entrepreneurship BiS Platform set out to ask 10 scholars from CBS to offer their thoughts on 5 dimensions with regard to entrepreneurship. In what could best be described as a curiosity-driven relay, these scholars passed the baton over to the next person, resulting in a ‘run’ across departments and varying traditions of thought.

Read the report here: http://openarchive.cbs.dk/bitstream/handle/10398/9136/The%20Baton.pdf?sequence=1

Testing for Distortions in Performance Measures: An Application to Residual Income-Based Measures like Economic Value Added

Mirjam van Praag is co-authoring this article together with Randolph Sloof.

Distorted performance measures in compensation contracts elicit suboptimal behavioral responses that may even prove to be dysfunctional (gaming). This paper applies the empirical test developed by Courty and Marschke (Review of Economics and Statistics, 90, 428-441) to detect whether the widely used class of residual income-based performance measures-such as economic value added (EVA)-is distorted, leading to unintended agent behavior. The paper uses a difference-in-differences approach to account for changes in economic circumstances and the self-selection of firms using EVA. Our findings indicate that EVA is a distorted performance measure that elicits the gaming response.

Published in Journal of Economics & Management Strategy.