Abstract
This paper investigates the interplay among three main elements of an entrepreneurial ecosystem: local universities, local financial system, and residents’ individual attitudes. Specifically, we study how the local availability of university knowledge interacts with the relative presence of cooperative banks in the local banking industry and with the residents’ tendency to behave opportunistically to determine the creation of high-tech ventures in a territory (i.e., Italian provinces). Our insight is that high information asymmetries impede high-tech entrepreneurial ideas based on university knowledge to attract external finance. Cooperative banks, which have trust-based relationships with the local community, are potentially a valuable source of finance for these entrepreneurial ideas, but are restrained by their inherent risk aversion. Accordingly, we argue that university knowledge and local presence of cooperative banks can interact either positively or negatively in determining the creation of high-tech ventures at the local level. We also contend that residents’ individual attitudes shape this interaction as trust-based relationships are more valuable in areas where residents tend to behave opportunistically. In the empirical part of the paper, we estimate zero-inflated negative binomial regressions where the dependent variable is the number of new high-tech ventures established in 792 province-industry pairs in the period 2012–2014. In line with our reasoning, we find that in provinces where residents tend to behave opportunistically, the relative presence of cooperative banks magnifies the positive effect of university knowledge on high-tech entrepreneurship. Conversely, this effect is negligible in provinces with less opportunistic residents.
Similar content being viewed by others
Notes
In line of this argument, having the US metropolitan areas as the unit of analysis, Samila and Sorenson (2011) have empirically demonstrated that the local availability of venture capital stimulates new firm creation at the local level.
Furthermore, it is worth noting that Italian cooperative banks are highly decentralized and poorly integrated (Ayadi et al. 2010) so that their branches have high autonomy in investment decisions.
Information asymmetries in the financing of new ventures in high-tech industry are made worse by the absence a track-record and by the fact that entrepreneurs in these industries are often reluctant to disclose relevant information on their innovative ideas to potential external investors because of appropriability concerns (Anton and Yao 2002; Ueda 2004; Katila et al. 2008. Moreover, traditional instruments that external financiers use to limit the risks associated with information asymmetries (e.g., the request for collaterals) are unsuitable for new ventures that base their competitive advantage on intangible assets, i.e., knowledge and innovation (Hall 2002; Denis 2004).
Due to data constraints, we excluded from the analysis the provinces of the Sardinia region. In 2011, the Italian Government re-organized the four provinces of the Sardinia region into eight new provinces. However, in several cases, the statistical sources of data that we use in the present study provide information on the Sardinia region by referring to the old classification based on four provinces.
Following the definition provided by the EUMIDA database, a university is “research active” if research is considered as constitutive part of institutional activities and it is organized with a durable perspective. See http://ec.europa.eu/research/era/docs/en/eumida-final-report.pdf for further information.
(1) Mathematics and computer sciences; (2) Physics; (3) Chemistry; (4) Earth sciences; (5) Biology; (6) Medicine; (7) Agricultural and veterinary sciences; (8) Civil engineering and architecture; (9) Industrial and information engineering; (10) Philological-literary sciences, antiquities and arts; (11) History, philosophy, psychology and pedagogy; (12) Law; (13) Economics and statistics; (14) Political and social sciences.
See the Appendix for Table 8 that shows the link between the high-tech industries and the 14 university scientific fields.
Faced with the problem of license fee evasion, in 2016, the Italian Government opted to lower the fee and included it into the electricity bill in an attempt to eliminate evasion.
Our findings are robust to other estimation techniques. Specifically, results (available from the authors upon request) do not change when using negative binomial and Poisson models.
The average number of new high-tech firms in each industry/province is 4.765.
According to the Eurostat classification we consider medium-tech manufacturing industries (NACE rev. 2 2 digit codes: 20, 27, 28, 29 and 30), knowledge-intensive market services (50, 51, 69, 70, 71, 73, 74, 78, and 80), knowledge-intensive financial services (64, 65, and 66) and other knowledge-intensive services (58, 75, 85, 86, 87, 88, 90, 91, 92, and 93).
While the literature depicts cooperative banks as small and characterized by self-governance (e.g., Brighi et al. 2016), exceptions exist. Large and more structure cooperative banks tend to adopt lending approaches that resemble those of commercial banks.
References
Acosta, M., Coronado, D., & Flores, E. (2011). University spillovers and new business location in high-technology sectors: Spanish evidence. Small Business Economics, 36(3), 365–376.
Acs, Z. J., Braunerhjelm, P., Audretsch, D. B., & Carlsson, B. (2009). The knowledge spillover theory of entrepreneurship. Small Business Economics, 32(1), 15–30.
Acs, Z. J., Autio, E., & Szerb, L. (2014). National systems of entrepreneurship: measurement issues and policy implications. Research Policy, 43(3), 476–494.
Acs, Z. J., Stam, E., Audretsch, D. B., & O’Connor, A. (2017). The lineages of the entrepreneurial ecosystem approach. Small Business Economics, 49(1), 1–10. https://doi.org/10.1007/s11187-017-9864-8.
Alessandrini, P., Presbitero, A. F., & Zazzaro, A. (2009). Banks, distances and firms’ financing constraints. Review of Finance, 13(2), 261–307.
Alessandrini, P., Presbitero, A. F., & Zazzaro, A. (2010). Bank size or distance: what hampers innovation adoption by SMEs? Journal of Economic Geography, 10(6), 845–881.
Alvedalen, J., & Boschma, R. (2017). A critical review of entrepreneurial ecosystems research: towards a future research agenda. European Planning Studies, 25(6), 887–903.
Angelini, P., & Cetorelli, N. (2003). The effects of regulatory reform on competition in the banking industry. Journal of Money, Credit and Banking, 35(5), 663–684.
Anselin, L., Varga, A., & Acs, Z. J. (2000). Geographic and sectoral characteristics of academic knowledge externalities. Papers in Regional Science, 79(4), 435–443.
Anton, J. J., & Yao, D. A. (2002). The sale of ideas: strategic disclosure, property rights, and contracting. The Review of Economic Studies, 69(3), 513–531.
Arnone, M., Farina, G., & Modina, M. (2015). Technological districts and the financing of innovation: opportunities and challenges for local banks. Economic Notes, 44(3), 483–510.
Audretsch, D. B., & Lehmann, E. E. (2005). Does the knowledge spillover theory of entrepreneurship hold for regions? Research Policy, 34(8), 1191–1202.
Audretsch, D. B., & Stephan, P. (1999). How and why does knowledge spill over in biotechnology? In D. B. Audretsch & R. Thurik (Eds.), Innovation, industry evolution, and employment (pp. 216–229). Cambridge: Cambridge University Press.
Auerswald, P. E., & Dani, L. (2017). The adaptive life cycle of entrepreneurial ecosystems: the biotechnology cluster. Small Business Economics, 49(1), 97–117. doi:https://doi.org/10.1007/s11187-017-9869-3.
Ayadi, R., Llewellyn, D. T., Schmidt, R. H., Arbak, E., & De Groen, W. P. (2010). Investigating diversity in the banking sector in Europe. CEPS Paperbacks. Available at SSRN: http://ssrn.com/abstract=1677335.
Baptista, R., & Mendonça, J. (2010). Proximity to knowledge sources and the location of knowledge-based start-ups. The Annals of Regional Science, 45(1), 5–29.
Beck, T., Hesse, H., Kick, T., & von Westernhagen, N. (2009). Bank ownership and stability: evidence from Germany. Tilburg University, Working Paper. Available at: http://www.tilburguniversity.edu/webwijs/files/center/beck/bankstabilityownership.pdf.
Belsley, D. A., Kuh, E., & Welsch, R. E. (1980). Regression diagnostics: identifying influential data and sources of collinearity. New York: Wiley.
Benfratello, L., Schiantarelli, F., & Sembenelli, A. (2008). Banks and innovation: microeconometric evidence on Italian firms. Journal of Financial Economics, 90(2), 197–217.
Berger, A. N., & Udell, G. F. (2002). Small business credit availability and relationship lending: the importance of bank organisational structure. The Economic Journal, 112(477), F32–F53.
Berger, A. N., & Udell, G. F. (2006). A more complete conceptual framework for SME finance. Journal of Banking & Finance, 30(11), 2945–2966.
Berger, A. N., Miller, N. H., Petersen, M. A., Rajan, R. G., & Stein, J. C. (2005). Does function follow organizational form? Evidence from the lending practices of large and small banks. Journal of Financial Economics, 76(2), 237–269.
Bertoni, F., Colombo, M. G., & Quas, A. (2015). The pattern of venture capital investments in Europe. Small Business Economics, 45(3), 543–560.
Bonaccorsi, A., Colombo, M. G., Guerini, M., & Rossi-Lamastra, C. (2013). University specialization and new firm creation across industries. Small Business Economics, 41(4), 837–863.
Bonaccorsi, A., Colombo, M. G., Guerini, M., & Rossi-Lamastra, C. (2014). The impact of local and external university knowledge on the creation of knowledge-intensive firms: Evidence from the Italian case. Small Business Economics, 43(2), 261–287.
Brighi, P., Lucarelli, C., & Venturelli, V. (2016). Predictive strenghts of lending technologies. Working Paper.
Brown, R., & Mason, C. (2014). Inside the high-tech black box: A critique of technology entrepreneurship policy. Technovation, 34(12), 773–784.
Brown, R., & Mason, C. (2017). Looking inside the spiky bits: a critical review and conceptualisation of entrepreneurial ecosystems. Small Business Economics, 49(1), 11–30.
Cameron, A. C., & Trivedi, P. K. (2009). Microeconometrics using Stata (Vol. 5). College Station: Stata Press.
Carpenter, R. E., & Petersen, B. C. (2002). Capital market imperfections, high-tech investment, and new equity financing. The Economic Journal, 112(477), F54–F72.
Cesarini, F., Ferri, G., & Giardino, M. (1996). Credito e sviluppo. Banche locali cooperative e imprese minori. Bologna: Il Mulino.
Chen, H., Gompers, P., Kovner, A., & Lerner, J. (2010). Buy local? The geography of venture capital. Journal of Urban Economics, 67(1), 90–102.
Coffano, M., & Tarasconi, G. (2014). CRIOS-Patstat database: sources, contents and access rules. Center for Research on Innovation, Organization and Strategy, Working Paper No. 1. Available at: http://ssrn.com/abstract=2404344.
Cohen, B. (2006). Sustainable valley entrepreneurial ecosystems. Business Strategy and the Environment, 15(1), 1–14.
Colombo, M. G., Croce, A., & Guerini, M. (2013). The effect of public subsidies on firms’ investment–cash flow sensitivity: Transient or persistent? Research Policy, 42(9), 1605–1623.
Colombo, M. G., Franzoni, C., & Rossi-Lamastra, C. (2015). Internal social capital and the attraction of early contributions in crowdfunding. Entrepreneurship Theory and Practice, 39(1), 75–100.
Cumming, D., & Dai, N. (2010). Local bias in venture capital investments. Journal of Empirical Finance, 17(3), 362–380.
Da Rin, M., Hellmann, T. F., & Puri, M. (2011). A survey of venture capital research. National Bureau of Economic Research, Working Paper No. w17523. Available at: http://www.nber.org/papers/w17523.pdf.
de Guevara, J. F., & Maudos, J. (2009). Regional financial development and bank competition: effects on firms’ growth. Regional Studies, 43(2), 211–228.
De Massis, A., Audretsch, D., Uhlaner, L., & Kammerlander, N. (2017). Innovation with limited resources: Management lessons from the German Mittelstand. Journal of Product Innovation Management. https://doi.org/10.1111/jpim.12373.
Deloof, M., & La Rocca, M. (2015). Local financial development and the trade credit policy of Italian SMEs. Small Business Economics, 44(4), 905–924.
Denis, D. J. (2004). Entrepreneurial finance: an overview of the issues and evidence. Journal of Corporate Finance, 10(2), 301–326.
EVCA (2015). 2014 European Private Equity Activity. Statistics on Fundraising, Investments & Divestments. Available at: http://www.investeurope.eu/media/385581/2014-european-private-equity-activity-final-v2.pdf.
Feld, B. (2012). Startup communities: building an entrepreneurial ecosystem in your city. Hoboken: John Wiley & Sons.
Ferri, G., Kalmi, P., & Kerola, E. (2014). Does bank ownership affect lending behavior? evidence from the Euro area. Journal of Banking & Finance, 48, 194–209.
Fiordelisi, F., & Mare, D. S. (2014). Competition and financial stability in European cooperative banks. Journal of International Money and Finance, 45, 1–16.
Fischer, M. M., & Varga, A. (2003). Spatial knowledge spillovers and university research: evidence from Austria. The Annals of Regional Science, 37(2), 303–322.
Fontes, M. (2005). The process of transformation of scientific and technological knowledge into economic value conducted by biotechnology spin-offs. Technovation, 25(4), 339–347.
Fonteyne, W. (2007). Cooperative Banks in Europe-Policy Issues. International Monetary Fund, Working Paper No. 07/159. Available at: http://www.imf.org/external/pubs/ft/wp/2007/wp07159.pdf.
Fritsch, M., & Aamoucke, R. (2013). Regional public research, higher education, and innovative start-ups: an empirical investigation. Small Business Economics, 4(4), 865–885.
Gertler, M. S. (2010). Rules of the game: the place of institutions in regional economic change. Regional Studies, 44(1), 1–15.
Ghio, N., Guerini, M., Lehmann, E. E., & Rossi-Lamastra, C. (2015). The emergence of the knowledge spillover theory of entrepreneurship. Small Business Economics, 44(1), 1–18.
Ghio, N., Guerini, M., & Rossi-Lamastra, C. (2016). University knowledge and the creation of innovative start-ups: an analysis of the Italian case. Small Business Economics, 47(2), 293–311. https://doi.org/10.1007/s11187-016-9720-2.
Glaeser, E. L., & Kerr, W. (2009). Local industrial conditions and entrepreneurship: show much of the spatial distribution can we explain? Journal of Economics & Management Strategy, 18(3), 623–663.
Gompers, P. A. (1995). Optimal investment, monitoring, and the staging of venture capital. The Journal of Finance, 50(5), 1461–1489.
Gompers, P., & Lerner, J. (2001). The venture capital revolution. Journal of Economic Perspectives, 15(2), 145–168.
Graves, W. (2011). The southern culture of risk capital: the path dependence of entrepreneurial finance. Southeastern Geographer, 51(1), 49–68.
Guerini, M., & Quas, A. (2016). Governmental venture capital in Europe: screening and certification. Journal of Business Venturing, 31(2), 175–195.
Guiso, L., Sapienza, P., & Zingales, L. (2004). Does local financial development matter? The Quarterly Journal of Economics, 119(3), 929–969.
Hall, B. H. (2002). The financing of research and development. Oxford Review of Economic Policy, 18(1), 35–51.
Hellmann, T., & Puri, M. (2002). Venture capital and the professionalization of start-up firms: empirical evidence. The Journal of Finance, 57(1), 169–197.
Hesse, H., & Cihak, M. (2007). Cooperative banks and financial stability. International Monetary Fund, Working Paper No. 07/02. Available at: http://www.imf.org/external/pubs/ft/wp/2007/wp0702.pdf.
Howorth, C., & Moro, A. (2006). Trust within entrepreneur bank relationships: insights from Italy. Entrepreneurship Theory and Practice, 30(4), 495–517.
Isenberg, D. J. (2010). How to start an entrepreneurial revolution. Harvard Business Review, 88(6), 40–50.
Isenberg, D. (2011). The entrepreneurship ecosystem strategy as a new paradigm for economic policy: Principles for cultivating entrepreneurship. Babson College. Available at: http://entrepreneurialrevolution.com.
Kaplan, S. N., & Strömberg, P. (2003). Financial contracting theory meets the real world: An empirical analysis of venture capital contracts. The Review of Economic Studies, 70(2), 281–315.
Katila, R., Rosenberger, J. D., & Eisenhardt, K. M. (2008). Swimming with sharks: technology ventures, defence mechanisms and corporate relationships. Administrative Science Quarterly, 53(2), 295–332.
Kelly, R. (2011). The Performance and Prospects of European Venture Capital. European Investment Fund, Working Paper No. 2011/09. Available at: http://www.eif.org/news_centre/publications/eif_wp_2011_009_EU_Venture.pdf.
Kerr, W., Lerner, J., & Schoar, A. (2014). The consequences of entrepreneurial finance: Evidence from angel financings. Review of Financial Studies, 27(1), 20–55.
Lasch, F., Robert, F., & Le Roy, F. (2013). Regional determinants of ICT new firm formation. Small Business Economics, 40(3), 671–686.
Lerner, J. (1995). Venture capitalists and the oversight of private firms. The Journal of Finance, 50(1), 301–318.
Minetti, R., & Zhu, S. C. (2011). Credit constraints and firm export: Microeconomic evidence from Italy. Journal of International Economics, 83(2), 109–125.
Qian, H., & Acs, Z. J. (2013). An absorptive capacity theory of knowledge spillover entrepreneurship. Small Business Economics, 40(2), 185–197.
Qian, H., & Yao, X. (2017). The Role of Research Universities in US College-Town Entrepreneurial Ecosystems. Available at SSRN: https://ssrn.com/abstract=2938194.
Qian, H., Acs, Z. J., & Stought, R. R. (2013). Regional systems of entrepreneurship: the nexus of human capital, knowledge and new firm formation. Journal of Economic Geography, 13(4), 559–587.
Rasmusen, E. (1988). Mutual banks and stock banks. Journal of Law and Economics, 31(2), 395–421.
Riciola, & Furlò (2016) Qual è la banca delle startup italiane? Il credito cooperativo, lo dicono i numeri. http://startupitalia.eu/52853-20160324-fondo-di-garanzia-startup-credito-cooperativo. Accessed on 31st Oct 2016.
Samila, S., & Sorenson, O. (2011). Venture capital, entrepreneurship, and economic growth. The Review of Economics and Statistics, 93(1), 338–349.
Schartinger, D., Rammer, C., Fischer, M. M., & Fröhlich, J. (2002). Knowledge interactions between universities and industry in Austria: sectoral patterns and determinants. Research Policy, 31(3), 303–328.
Schneider, C., & Veugelers, R. (2010). On young highly innovative companies: why they matter and how (not) to policy support them. Industrial and Corporate Change, 19(4), 969–1007.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25(1), 217–226.
Sorenson, O., & Stuart, T. E. (2001). Syndication networks and the spatial distribution of venture capital investments. The American Journal of Sociology, 106(6), 1546–1588.
Spigel, B. (2017). The relational organization of entrepreneurial ecosystems. Entrepreneurship Theory and Practice, 41(1), 49–72.
Stam, E. (2015). Entrepreneurial ecosystems and regional policy: a sympathetic critique. European Planning Studies, 23(9), 1759–1769.
Stam, F. C., & Spigel, B. (2016). Entrepreneurial ecosystems. USE Discussion paper series, 16(13), 1–18.
Stephan, P. E. (2012). How economics shapes science. Cambridge: Harvard University Press.
Sussan, F., & Acs, Z. J. (2017). The digital entrepreneurial ecosystem. Small Business Economics, 49(1), 55–73.
Ueda, M. (2004). Banks versus venture capital: Project evaluation, screening, and expropriation. The Journal of Finance, 59(2), 601–621.
Usai, S., & Vannini, M. (2005). Banking structure and regional economic growth: lessons from Italy. The Annals of Regional Science, 39(4), 691–714.
Vuong, Q. H. (1989). Likelihood ratio tests for model selection and non-nested hypotheses. Econometrica: Journal of the Econometric Society, 57(2), 307–333.
Wright, M., Siegel, D. S., & Mustar, P. (2017). An emerging ecosystem for student start-ups. Journal of Technology Transfer, 42(4), 909–922.
Author information
Authors and Affiliations
Corresponding author
Appendix
Appendix
Rights and permissions
About this article
Cite this article
Ghio, N., Guerini, M. & Rossi-Lamastra, C. The creation of high-tech ventures in entrepreneurial ecosystems: exploring the interactions among university knowledge, cooperative banks, and individual attitudes. Small Bus Econ 52, 523–543 (2019). https://doi.org/10.1007/s11187-017-9958-3
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11187-017-9958-3