Universities as Innovators : The Effects of Academic Incubators on Patent Quality

Despite a wealth of research on university incubators, science parks, and other attempts at commercialization, there is little consensus on the effectiveness of university-sponsored commercial innovation. We analyze the impact of incubators and other types of facilitators on the quality of innovations produced by US research-intensive academic institutions from 1969 to 2012. Using forward patent citations to measure the quality of innovation we show that establishing a university-affiliated incubator is followed by a reduction in innovation on campus, controlling for patent-, university-, and time-specific characteristics. The results hold when we control for the endogeneity of the decision to establish an incubator using the presence of incubators at peer institutions as an instrument. The results suggest that university incubators compete for resources with technology transfer offices and other campus programs and activities, such that the useful and commercializable outputs they generate can be partially offset by reductions in innovation elsewhere on campus. JEL: C23, C26, L26, O31, O32