Does the Governance by Academics influence Firms’ Financial Performances? Evidence from New-Technology Based Firms (NTBFs)

Objectives: Based on a sample of Italian New Technology Based Firms, hereafter NTBFs, grown in a University incubator, this paper aims to verify if the presence of academic scholars in the board of directors of these firms can strengthen or weaken their economic and financial performances. Prior Work: Previous studies focused the various services offered by incubators and the role played by Universities in sustaining and fostering the growth of young entrepreneurial firms. Some researches pointed out the importance of university link and knowledge flows on the overall corporate performance and showed that the entrepreneurial attitude of academics is related to effective technology transfer and to the commercialization of research outputs. In our opinion, there is a lack of research about the governance of NTBFs, especially about the characteristics of the people involved. Approach: This research has been carried out empirically on a sample of NTBFs graduated from I3P, the Turin Polytechnic’s Incubator, where I3P stands for “Incubatore Imprese Innovative Politecnico”. We tested the following hypotheses: H1: Governance by academics might lead to lower NTBF’s financial performance. H2: Higher is the academic status of the scholar involved in the governance, lower is the financial performance of the NTBF. In order to analyse economic and financial performances of NTBFs, financial data were collected from the related financial statements. In order to analyse the “governance by academics” we collected information both from financial statements and the web, then we crosschecked the data through an interview with the I3P CEO. All data were then analysed using SPSS. Results: The analysis of our findings points out that, in a certain way, a little negative correlation can be found between governance by academics and financial performances of NTBFs. This allows to partially validate H1 “Governance by academics might lead to lower NTBF’s financial performance”. We weren’t instead able to validate H2 “Higher is the academic status of the scholar involved in the governance, lower is the financial performance of the NTBF”. Implications: We can say that, given the crucial value of innovation for the NTBFs’ survival, these results suggest that academics may have an important role in the governance of these firms. This could address the attention of Public Institutions, especially Universities and Polytechnics, for stating and issuing appropriate policies regarding external commitments eventually involving their staff. Value: This study tries to contribute to the considerable debate developed, in the recent years, about the outcomes of firm–university linkages in terms of economical and financial performance of resulting NTBFs.