An application of lemon theory to the case of university spin-offs
Abstract
Purpose: Policies implemented by different government administrations to promote the transfer of research results have significantly increased the number of university spin-offs created and their survival rate. However, these companies are frequently perceived by investors as less market or commercial oriented than non-academic start-ups. This paper test this hypothesis and discusses in the framework of Akerlof ´s lemon market theory the implications of the evidence found for the growth, performance and capacity of attracting private investors to these companies.
Design: We analysed a sample of 20 USOs of the University of Santiago de Compostela, Spain, using their financial statements and the R&D grants received during their initial five years. We carried out an analysis of conglomerates to identify the market orientation of the USOs, and the moment when it is clearly developed.
Findings: Evidence shows that some of these companies appear to have been set up to provide continuity to research projects, rather than to exploit research results. In these companies most of the revenues are consistently mainly obtained by obtaining R&D public grants. This introduces "orientation risk" in addition to the common risks of start-ups in general.
Practical Implications: To solve this problem a series of measures used in other lemon market situations can be adapted to the university spin-offs issue. This includes the promotion of commercial activities over R&D grants and reducing agency problems between academic entrepreneurs and professional investors among others.
Original Value: We find that the market orientation of USOs cannot be identified in their earlier stages by conventional financial analysis and discuss the implications for attracting investors to these companies.
Keywords: Lemon theory; university spin-offs; Akerlof; market orientation; agency problems.
[PT]
Título: "Uma aplicação da teoria do limão ao caso dos spin-offs universitários"
Resumo
Objetivo: As políticas implementadas por diferentes administrações governamentais para promover a transferência dos resultados da pesquisa aumentaram significativamente o número de spin-offs de universidades criadas e sua taxa de sobrevivência. No entanto, essas empresas são freqüentemente percebidas pelos investidores como menos orientadas para o mercado ou para o mercado do que as empresas não acadêmicas. Este artigo testa essa hipótese e discute, no marco da teoria do mercado de limão de Akerlof, as implicações das evidências encontradas para o crescimento, desempenho e capacidade de atrair investidores privados para essas empresas.
Desenho/metodologia/abordagem: Analisamos uma amostra de 20 USOs da Universidade de Santiago de Compostela, Espanha, usando suas demonstrações financeiras e os subsídios de P&D recebidos durante seus cinco anos iniciais. Realizamos uma análise de conglomerados para identificar a orientação de mercado das USOs e o momento em que ela é claramente desenvolvida.
Resultados: As evidências mostram que algumas dessas empresas parecem ter sido criadas para dar continuidade aos projetos de pesquisa, em vez de explorar os resultados da pesquisa. Nessas empresas, a maior parte das receitas é obtida principalmente pela obtenção de subsídios públicos de P&D. Isso introduz o "risco de orientação", além dos riscos comuns das start-ups em geral.
Implicações: Para resolver esse problema, uma série de medidas usadas em outras situações do mercado de limão pode ser adaptada à questão dos spin-offs da universidade. Isso inclui a promoção de atividades comerciais com subsídios de P&D e a redução de problemas de agência entre empreendedores acadêmicos e investidores profissionais, entre outros.
Originalidade: descobrimos que a orientação de mercado das USOs não pode ser identificada em seus estágios iniciais pela análise financeira convencional e discutimos as implicações para atrair investidores para essas empresas.
Palavras-chave: teoria do limão; spin-offs de universidades; Akerlof; orientação de mercado; problemas de agência
Full Text:
PDFReferences
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European Journal of Applied Business and Management
ISSN: 2183-5594
DOI: https://doi.org/10.58869/EJABM
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