University License Agreements, Faculty Disclosures, Start-Ups, Entrepreneurship, Financial Market Conditions and Technology Transfer

In Article 1, we examine the commercialization of university inventions in licensing to both start-up firms and established firms, and seek to determine when licensing to start-ups is more likely. We construct a theoretical model that predicts start-ups are more likely if their opportunity cost of development and commercialization is lower or if the technology transfer offices' (TTO) opportunity cost of searching for a partner among established firms is higher. Using data from the Association of University Technology Managers, the National Venture Capital Association Yearbook, and the National Research Council, we find that inventor quality and measures of past TTO success (age, the number of disclosures, gross royalties) are all positively and significantly related to the number of licenses to both start-ups and established firms. However, we also find that start-up activity is positively and significantly related to the interest rate and rate of return to venture capital.

Article 2

The Bayh-Dole Act (1980) allows U. S. universities to own and license inventions arising from federally-funded research by their faculty. This has lead to a sharp increase in the rate of faculty disclosing inventions to their technology transfer offices (TTOs). I examine the factors contributing to the increase in faculty disclosure rates. Using data from the Association of University Technology Managers (AUTM) and data from the National Venture Capital Association Yearbook for 1993-2002, I find that inventor quality and TTO experience have a positive impact on the rate of faculty disclosures. The evidence shows venture capital spending and financial market returns are positively related to faculty disclosures. These findings show faculty incentives to disclose are associated with expansionary financial market conditions. Faculty are more likely to disclose when venture capital spending in their state is rising. High quality engineering faculty are more likely to disclose than other academic inventors. My research suggests a need for stronger ties between TTOs, industry and university.

Article 3

The commercialization of university inventions involves licensing agreements and negotiations that often include sponsored research commitments, royalty payments and equity for the university. This paper examines the factors contributing to university royalties and equity universities receive from commercializing technology to private industry. I show that characteristics of university technology transfer offices (TTOs), financial market conditions and venture capital spending affect gross royalties. Using panel data for 110 U.S. universities during the period 1993-2002, data from Association of University Technology Managers (AUTM) and the National Venture Capital Association Yearbook, I find that university life sciences quality, start-ups, interest rates and venture capital spending affect licensing income. I also find evidence that the cashed in equity is positively related to returns to the S & P 500 index and that universities with medical schools receive more royalties, and cash in more equity. These findings show that university income from licensing activities is impacted by individual university characteristics and financial market conditions.