University Research and Technology Transfer: A Competing Risks Approach

Abstract

The paper uses a competing risk approach to characterize the process of transferring technology from University of California, San Diego to start-up and established firms. Licensing technology is formalized in my proposed framework as a mechanism in which both types of firms compete to license a given invention. The main purpose of the analysis is to identify the differences between the two processes: start-up licensing process and established firm licensing process. These differences refer to the quality of technology licensed by the two types of firm and the speed of licensing the technologies after disclosure.In addition, the methodology and results of the paper provide a deeper understanding of the managerial decisions of firm creation and can help policymakers at the state and federal level design commercialization and licensing policies that can lead to a successful commercialization of inventions with beneficial impact on consumers and society overall. The empirical analysis uses a unique panel data set obtained from the Technology Transfer & Intellectual Property Services at University of California at San Diego¹, consisting of 406 cases of invention disclosures between1971-2003². Start-up firms are firms founded on the basis of inventions licensed from UCSD by the scientific inventors of the respective inventions. Inventor-founded firms are arguably better match for the respective inventions due to the informational advantage of the founders in the use of the technology licensed.The results show that start-up firms generally license the inventions faster than the established firms, due to the asymmetric information about the potential value of the invention. In addition, estimates of the quality characteristics of inventions bring evidence that start-up firms license higher quality inventions than established firms.

Key words: start-ups, competing risks, licensing, university research, citations, secrecies