Effects of the Quality of Science and Innovation on Venture Finance: Evidence from University Spinoffs in Japan

Author Name FUKUGAWA Nobuya (Tohoku University)
Creation Date/NO. February 2022 22-E-006
Research Project Developing an Entrepreneurial Ecosystem
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University spinoffs build on strong science, which allows them to create radical innovation. Radical innovation entails uncertainty in entrepreneurial outcomes, necessitating the participation of individuals and organizations that bridge the gap between science and the market. Recognizing that the commercial success of university spinoffs hinges on the entrepreneurial ecosystems they are embedded in, this study establishes unbalanced panel data (2015-2020) to examine the relationships among the key factors in university spinoff ecosystems: scientific productivity of academic researchers associated with university spinoffs, radicalness of the innovation created by the university spinoff, and entrepreneurial intermediaries who bridge the gap between science and the market. Estimation results reveal that h5-index positively affects venture capital funding. The quality of innovation does not affect the probability of university spinoffs receiving venture financing, negating the scout function of entrepreneurial intermediaries. Venture capital financing positively affects sales growth of university spinoffs, corroborating the coach function of entrepreneurial intermediaries.

Forthcoming: Fukugawa, Nobuya. "Effects of the quality of science and innovation on venture financing: Evidence from university spinoffs in Japan," Applied Economics Letters.

Published: Fukugawa, Nobuya, 2022. "Effects of the quality of science on the initial public offering of university spinoffs: Evidence from Japan," Scientometrics, Volume 127, Issue 8 (2022), 4439–4455.