Despite the depth and breadth of the existing literature on university entrepreneurship, research has focused almost exclusively on licensing patents and founding spin-offs by faculty and staff. In comparison, much less evidence has been produced on start-ups created by students and graduates, mainly due to a lack of comprehensive data. This paper evaluates the impact of education—academic subject and foreign education experience—on the creation of firms by university graduates. In terms of the academic subject, the focus is on the distinction between science, technology, engineering, and math (STEM) fields and non-STEM fields. With respect to foreign education experience, the focus is on graduates’ experience studying outside their home country. Our analysis extends the scope of existing research in two ways. First, we consider the entire education history of graduates, not just from the researched university. Second, the paper extends the traditional focus on international students and analyzes the foreign education experience of both domestic and international students. The results indicate a positive relationship between having a non-STEM degree and entrepreneurial activity. A combination of STEM and non-STEM degrees is also positively related to the entrepreneurial propensity of graduates. Students with foreign education experience are significantly more likely to become entrepreneurs than those without such experience. Many governments focus their policy on attracting and retaining foreign students, especially those with degrees in STEM fields. Our results suggest that it is more important for a government to focus on both foreign-born students and domestic students who have foreign study experience.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Genetic factors are encoded in DNA and transmitted biologically. In particular, Nicolaou and Shane (2009) discuss two approaches, namely quantitative genetics and molecular genetics, which can be used to identify specific genes that contribute to variation between individuals in social outcomes.
In these studies, the main focus is in fact on immigrants, and the topic of foreign students is addressed indirectly.
For instance, a 2007 alumni survey of Tsinghua University was sent to 26,700 graduates and received 2966 replies, for a response rate of 11.2% (Eesley 2016).
The importance of entrepreneurship in the non-profit sector as well as social entrepreneurship has been increasingly emphasized (Badelt 1997). The shift is led by the recognition that for-profit entrepreneurship is related to inequality (Isenberg 2014; Piketty 2014; Halvarsson et al. 2018). As such, entrepreneurship needs to address pressing social problems such as poverty, social exclusion, and the environment (Dacin et al. 2011). While for-profit firms could also take on these missions, non-profit organizations are more actively engaged in them. It is this rationale that leads us to consider entrepreneurial activity in both the for-profit and non-profit sectors.
Respondents were asked to provide all their educational background at the U of T and anywhere else.
Respondents with foreign education experience include both foreign students at the U of T and domestic Canadian students who have studied outside Canada.
Little research has been conducted on the impact of foreign education experience on graduates’ entrepreneurship. Eesley (2016) considers the role of foreign experience in graduates’ entrepreneurship at Tsinghua University, China, but in that study foreign experience comprises either education or work experience abroad.
Acemoglu, D. (1998). Why do new technologies complement skills? Directed technical change and wage inequality. Quarterly Journal of Economics, 113(4), 1055–1089.
Agrawal, A., Kapur, D., McHale, J., & Oettl, A. (2011). Brain drain or brain bank? The impact of skilled emigration on poor-country innovation. Journal of Urban Economics, 69(1), 43–55.
Alvarez, C., Urbano, D., Coduras, A., & Ruiz-Navarro, J. (2011). Journal of Small Business and Enterprise Development, 18(1), 120–140.
Amior, M. (2015). Why are higher skilled workers more mobile geographically? The role of the job surplus. Centre for Economic Performance Discussion Paper 1338.
Andersson, M., & Koster, S. (2011). Sources of persistence in regional start-up rates: evidence from Sweden. Journal of Economic Geography, 11(1), 179–201.
Antoncic, B., Kregar, T. B., Singh, G., & DeNoble, A. F. (2015). The Big Five personality-entrepreneurship relationship: evidence from Slovenia. Journal of Small Business Management, 53(3), 819–841.
Arrow, K. J. (1962). Economic welfare and the allocation of resources for invention. In R. R. Nelson (Ed.), The rate and direction of inventive activity (pp. 609–626). Princeton, NJ: Princeton University Press.
Åstebro, T., & Bazzazian, N. (2011). Universities, entrepreneurship and local economic development. In M. Fritsch (Ed.), Handbook of research on entrepreneurship and regional development: national and regional perspective (pp. 252–333). Cheltenham: Edward Elgar.
Åstebro, T., Bazzazian, N., & Braguinsky, S. (2012). Startups by recent university graduates and their faculty: implications for university entrepreneurship policy. Research Policy, 41(4), 663–677.
Atkinson, R. D., & Mayo, M. (2010). Refueling the U.S. innovation economy: fresh approaches to Science, Technology, Engineering and Mathematics (STEM) education. https://www.itif.org/files/2010-refueling-innovation-economy.pdf. Accessed 10 Jan 2019.
Attour, A., & Lazaric, N. (2018). From knowledge to business ecosystems: emergence of an entrepreneurial activity during knowledge replication. Small Business Economics. https://doi.org/10.1007/s11187-018-0035-3.
Audretsch, D., & Keilbach, M. (2004). Entrepreneurship capital and economic performance. Regional Studies, 38(8), 949–959.
Azoulay, P., Jones, B., Kin, J. D., & Miranda, J. (2018). Research: the average age of a successful startup founder is 45. https://hbr.org/2018/07/research-the-average-age-of-a-successful-startup-founder-is-45/. Accessed 10 Jan 2019.
Badelt, C. (1997). Entrepreneurship theories of the non-profit sector. International Journal of Voluntary and Nonprofit Organizations, 8(2), 162–178.
Baron, R. A., & Markman, G. D. (2003). Beyond social capital: the role of entrepreneurs’ social competence in their financial success. Journal of Business Venturing, 18(1), 41–60.
Barro, R. J., & Lee, J. W. (1996). International measures of schooling years and schooling quality. American Economic Review, 86(2), 218–223.
Becker, G. (1964). Human capital: a theoretical and empirical analysis with special reference to education. Chicago, IL: University of Chicago Press.
Benedict, M. E., McClough, D., & Hoag, J. (2012). STEM: a path to self-employment and jobs? Journal of Entrepreneurship Education, 15(1), 99–122.
Benos, N., & Zotou, S. (2014). Education and economic growth: a meta-regression analysis. World Development, 64, 669–689.
Bergman, E. M., & Maier, G. (2009). Network central: regional positioning for innovative advantage. Annals of Regional Science, 43(3), 615–644.
Blanchflower, D. G., & Meyer, B. D. (1994). A longitudinal analysis of the young self-employed in Australia and the United States. Small Business Economics, 6(1), 1–19.
Blume-Kohout, M. E. (2016). Imported entrepreneurs: foreign-born scientists and engineers in U.S. STEM fields entrepreneurship. https://www.sba.gov/advocacy/imported-entrepreneurs-foreign-born-scientists-and. Accessed 10 Jan 2019.
Boschma, R., & Frenken, K. (2010). The spatial evolution of innovation networks: a proximity perspective. In R. Boschma & R. Martin (Eds.), The handbook of evolutionary economic geography (pp. 120–135). Cheltenham: Edward Elgar.
Bramwell, A., & Wolfe, D. A. (2008). Universities and regional economic development: the entrepreneurial University of Waterloo. Research Policy, 37(8), 1175–1187.
Breznitz, S. M., & Feldman, M. P. (2012). The engaged university. Journal of Technology Transfer, 37(2), 139–157.
Breznitz, S. M., & Kenney, M. (2018). Slouching toward the Downtown Abbey university system. Issues in Science and Technology, 34(3), 74–82.
Brush, C. G., & Cooper, S. Y. (2012). Female entrepreneurship and economic development: an international perspective. Entrepreneurship and Regional Development, 24(1–2), 1–6.
Cai, Z., & Winters, J. V. (2017). Self-employment differentials among foreign-born STEM and non-STEM workers. Journal of Business Venturing, 32(4), 371–384.
Carpenter, M. A., Sanders, G., & Gregersen, H. B. (2001). Bundling human capital with organizational context: the impact of international assignment experience on multinational firm performance and CEO pay. Academy of Management Journal, 44(3), 493–511.
CEBR. (2012). Employment and income in science-based occupations and industries: what’s happened and where things are going? London: Centre for Economics and Business Research.
Cetindamar, D., Gupta, V. K., Karadeniz, E. E., & Egrican, N. (2012). What the numbers tell: the impact of human, family and financial capital on women and men’s entry into entrepreneurship in Turkey. Entrepreneurship and Regional Development, 24(1–2), 29–51.
Chambers, E., Foulon, M., Handfield-Jones, H., Hankin, S., & Michaels, E. (1998). The war for talent. McKinsey Quarterly, 3, 44–57.
Chapple, W., Lockett, A., Siegel, D., & Wright, M. (2005). Assessing the relative performance of U.K. university technology offices: parametric and non-parametric evidence. Research Policy, 34(3), 369–384.
Clark, B. R. (1998). Creating entrepreneurial universities: organizational pathways of transformation. Bingley: Emerald Group.
Crant, J. M. (1996). The proactive personality scale as a predicator of entrepreneurial intentions. Journal of Small Business Management, 34(3), 42–49.
Crossman, J. E., & Clarke, M. (2010). International experience and graduate employability: stakeholder perceptions on the connection. Higher Education, 59(5), 599–613.
Dabic, M., Daim, T., Bayraktaroglu, E., Novak, I., & Basic, M. (2012). Exploring gender differences in attitudes of university students towards entrepreneurship: an international survey. International Journal of Gender and Entrepreneurship, 4(3), 316–336.
Dacin, M. T., Dacin, P. A., & Tracey, P. (2011). Social entrepreneurship: a critique and future directions. Organization Science, 22(5), 1203–1213.
Daily, C. M., Certo, S. T., & Dalton, D. R. (2000). International experience in the executive suite: the path to prosperity? Strategic Management Journal, 21(4), 515–523.
David, P. A. (1985). Clio and the economics of QWERTY. American Economic Review, 75(2), 332–337.
Davidsson, P., & Honig, B. (2003). The role of social and human capital among nascent entrepreneurs. Journal of Business Venturing, 18(3), 301–331.
DeNisi, A. S. (2015). Some further thoughts on the entrepreneurial personality. Entrepreneurship Theory and Practice, 39(5), 997–1003.
Di Gregorio, D., & Shane, S. (2003). Why do some universities generate more start-ups than others? Research Policy, 32(2), 209–227.
Dickson, P. H., Solomon, G. T., & Weaver, K. M. (2008). Entrepreneurial selection and success: does education matter? Journal of Small Business and Enterprise Development, 15(2), 239–258.
DOE. (2014). Baccalaureate and beyond: a first look at the employment experience and lives of college graduates, 4 years on. U.S. DOE, Washington, DC: Department of Education.
Dunn, T., & Holtz-Eakin, D. (2000). Financial capital, human capital, and the transition to self-employment: evidence from intergenerational links. Journal of Labor Economics, 18(2), 282–305.
Eesley, C. (2016). Institutional barriers to growth: entrepreneurship, human capital and institutional change. Organization Science, 27(5), 1290–1306.
Eesley, C. E., Yang, D., Roberts, E. B., & Li, T. (2016). Understanding entrepreneurial process and performance: a cross-national comparison of alumni entrepreneurship between MIT and Tsinghua University. Asian Journal of Innovation and Policy, 5(2), 146–184.
Etzkowitz, H. (1983). Entrepreneurial scientists and entrepreneurial universities in American academic science. Minerva, 21(2–3), 198–233.
Fatlin, G. (2018). Brains versus capital: entrepreneurship for everyone. Singapore: World Scientific.
Feldman, M., & Desrochers, P. (2004). Truth for its own sake: academic culture and technology transfer at Johns Hopkins University. Minerva, 42(2), 105–126.
Fischer, E. M., Reuber, A. R., & Dyke, L. S. (1993). A theoretical overview and extension of research on sex, gender, and entrepreneurship. Journal of Business Venturing, 8(2), 151–168.
Flanagan, K., Uyarra, E., & Laranja, M. (2011). Reconceptualising the “policy mix” for innovation. Research Policy, 40(5), 702–713.
Foray, D., & Lundvall, B.-A. (1996). The knowledge-based economy: From the economics of knowledge to the learning economy. In OECD, Employment and growth in the knowledge-based economy (pp. 11–32). Paris: OECD.
Fortin, N. M. (2006). Higher-education policies and the college wage premium: cross-state evidence from the 1990s. American Economic Review, 96(4), 959–987.
Franzoni, C., Scellato, G., & Stephan, P. (2014). The mover’s advantage: the superior performance of migrant scientists. Economics Letters, 122(1), 89–93.
Fritsch, M. (2004). Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany. Journal of Evolutionary Economics, 14(5), 525–542.
Fritsch, M., & Wyrwich, M. (2014). The long persistence of regional levels of entrepreneurship: Germany, 1925-2005. Regional Studies, 48(6), 955–973.
GERA. (2018). GEM global report 2017/18. London: Global Entrepreneurship Research Association.
Giannetti, M., & Simonov, A. (2004). On the determinants of entrepreneurial activity: social norms, economic environment and individual characteristics. Swedish Economic Policy Review, 11(2), 269–313.
Gicheva, D., & Link, A. N. (2013). Leveraging entrepreneurship through private investments: does gender matter? Small Business Economics, 40(2), 199–210.
Gicheva, D., & Link, A. N. (2015). The gender gap in federal and private support for entrepreneurship. Small Business Economics, 45(4), 729–733.
Gimeno, J., Folta, T. B., Cooper, A. C., & Woo, C. Y. (1997). Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms. Administrative Science Quarterly, 42(4), 750–783.
Goldberg, L. R. (1992). The development of markers for the Big-Five factor structure. Psychological Assessment, 4(1), 26–42.
Goldschlag, N., & Miranda, J. (2016). Business dynamics statistics of high tech industries. Washington, DC: U.S. Census Bureau.
Greenwood, C., Harrison, M., & Vignoles, A. (2011). The labour market value of STEM qualifications and occupations. An analysis for the Royal Academy of Engineering. London: Department of Quantitative Social Science.
Guerrero, M., & Urbano, D. (2012). The development of an entrepreneurial university. Journal of Technology Transfer, 37(1), 43–74.
Guerzoni, M., & Raiteri, E. (2015). Demand-side vs. supply-side technology policies: hidden treatment and new empirical evidence on the policy mix. Research Policy, 44(3), 726–747.
Halvarsson, D., Korpi, M., & Wennberg, K. (2018). Entrepreneurship and income inequality. Journal of Economic Behavior and Organization, 145, 275–293.
Harrison, R. T., & Leitch, C. (2010). Voodoo institution or entrepreneurial university? Spin-off companies, the entrepreneurial system and regional development in the UK. Regional Studies, 44(9), 1241–1262.
Hsu, D. C., Roberts, E. B., & Eesley, C. E. (2007). Entrepreneurs from technology-based universities: Evidence from MIT. Research Policy, 36(5), 768–788.
Hunt, J., & Gauthier-Loiselle, M. (2010). How much does immigration boost innovation? American Economic Journal: Macroeconomics, 2(2), 31–56.
IIE. (2016). Open doors 2016. New York, NY: Institute of International Education.
Isenberg, D. (2014). Entrepreneurship always leads to inequality. https://hbr.org/2014/03/entrepreneurship-always-leads-to-inequality/. Accessed 10 Jan 2019.
Jones, P. (2001). Are educated workers really more productive. Journal of Development Economics, 64(1), 57–79.
Kerr, W., & Lincoln, W. (2010). The supply side of innovation: H-1B visa reforms and U.S. ethnic invention. Journal of Labor Economics, 28(3), 473–508.
Kitagawa, F. (2004). Universities and regional advantage: Higher education and innovation policies in English regions. European Planning Studies, 12(6), 835–852.
Kneale, P. (2008). Getting the best from an international year. Journal of Geography in Higher Education, 32(2), 337–345.
Korres, G. M. (2008). Technical change and economic growth: inside the knowledge based economy. London: Routledge.
Landry, R., Amara, N., & Rherrad, I. (2006). Why are some university researchers more likely to create spin-offs than others? Evidence from Canadian universities. Research Policy, 35(10), 1599–1615.
Lawton Smith, H., & Ho, K. (2006). Measuring the performance of Oxford University, Oxford Brookes University and the government laboratories’ spin-off companies. Research Policy, 35(10), 1554–1568.
Lazear, E. P. (2004). Balanced skills and entrepreneurship. American Economic Review, 94(2), 208–211.
Lee, N. (2017). Psychology and the geography of innovation. Economic Geography, 93(2), 106–130.
Lee, Y. S., & Eesley, C. (2018). The persistence of entrepreneurship and innovative immigrants. Research Policy, 47(6), 1032–1044.
Levine, R., & Rubinstein, Y. (2013). Small and illicit: who becomes an entrepreneur and do they earn more? NBER working paper 19276.
Lindley, J., & Machin, S. (2016). The rising postgraduate wage premium. Economica, 83(330), 281–306.
Maré, D. C., Le, T., Fabling, R., & Chappell, N. (2017). Productivity and the allocation of skills. Motu Working Paper 17–04.
Miller, D. J., & Acs, Z. J. (2017). The campus as entrepreneurial ecosystem: The University of Chicago. Small Business Economics, 49(1), 75–95.
Moretti, E. (2013). The new geography of jobs. New York, NY: Mariner Books.
Mowery, D. C., & Sampat, B. N. (2004). The Bayh-Dole Act of 1980 and university-industry technology transfer: a model for other OECD governments. Journal of Technology Transfer, 30(1–2), 115–127.
National Academies. (2010). Rising above the gathering storm: revisited. Washington, DC: National Academies Press.
Nicolaou, N., & Shane, S. (2009). Can genetic factors influence the likelihood of engaging in entrepreneurial activity. Journal of Business Venturing, 24(1), 1–22.
North, D. C. (1994). Economic performance through time. American Economic Review, 84(3), 359–368.
Obschonka, M., Schmitt-Rodermund, E., Silbereisen, R. K., Gosling, S. D., & Potter, J. (2013). The regional distribution and correlates of an entrepreneurship-prone personality profile in the United States, Germany, and the United Kingdom: a socioecological perspective. Journal of Personality and Social Psychology, 105(1), 104–122.
OECD. (2016). OECD science, technology and innovation outlook 2016. Paris: OECD.
OECD. (2017a). Education at a glance 2017. Paris: OECD.
OECD. (2017b). Entrepreneurship at a glance 2017. Paris: OECD.
Ozgen, C., Nijkamp, P., & Poot, J. (2012). Immigration and innovation in European regions. In P. Nijkamp, J. Poot, & M. Sahin (Eds.), Migration impact assessment: New horizons (pp. 261–300). Cheltenham: Edward Elgar.
Piketty, T. (2014). Capital in the twenty-first century. Cambridge, MA: Belknap Press.
Rauch, A., & Frese, M. (2007). Let’s put the person back into entrepreneurship research: A meta-analysis on the relationship between business owners’ personality traits, business creation, and success. European Journal of Work and Organizational Psychology, 16(4), 353–385.
Reuber, A. R., & Fischer, E. (1997). The influence of the management team’s international experience on the internationalization behaviors of SMEs. Journal of International Business Studies, 28(4), 807–825.
Reynolds, P. D. (1997). Who starts new firms? Preliminary explorations of firms-in-gestation. Small Business Economics, 9(5), 449–462.
Romer, P. (1986). Increasing returns and long run growth. Journal of Political Economy, 94(5), 1002–1037.
Rothaermel, F. T., Agung, S. D., & Jiang, L. (2007). University entrepreneurial: a taxonomy of the literature. Industrial and Corporate Change, 16(4), 691–791.
Saxenian, A. (2002). Silicon Valley’s new immigrant high-growth entrepreneurs. Economic Development Quarterly, 16(1), 20–31.
Saxenian, A. (2005). From brain drain to brain circulation: Transnational communities and regional upgrading in India and China. Studies in Comparative International Development, 40(2), 35–61.
Scellato, G., Franzoni, C., & Stephan, P. (2015). Migrant scientists and international networks. Research Policy, 44(1), 108–120.
Shane, S. (2004a). Academic entrepreneurship: university spin-offs and wealth creation. Cheltenham: Edward Elgar.
Shane, S. (2004b). Encouraging university entrepreneurship? The effect of the Bayh-Dole Act on university patenting in the United States. Journal of Business Venturing, 19(1), 127–151.
Shane, S., & Nicolaou, N. (2013). The genetics of entrepreneurial performance. International Small Business Journal, 31(5), 473–495.
Shane, S., & Stuart, T. (2002). Organizational endowments and the performance of university start-ups. Management Science, 48(1), 154–170.
Shane, S., & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy Management Review, 25(1), 217–226.
Siegel, D. S., Waldman, D., & Link, A. (2003). Assessing the impact of organizational practices on the relative productivity of university technology transfer offices: an exploratory study. Research Policy, 32(1), 27–48.
Siegel, D. S., Wright, M., & Lockett, A. (2007). The rise of entrepreneurial activity at universities: organizational and societal implications. Industrial and Corporate Change, 16(4), 489–504.
Siepel, J., Camerani, R., Pellegrino, G., & Masucci, M. (2016). The fusion effect: the economic returns to combining arts and science skills. London: Nesta.
Simpson, M., Tuck, N., & Bellamy, S. (2004). Small business success factors: the role of education and training. Education + Training, 46(8/9), 481–491.
Solow, R. (1956). A contribution to the theory of economic growth. Quarterly Journal of Economics, 70(1), 65–94.
Sørensen, M. P., Bloch, C., & Young, M. (2016). Excellence in the knowledge-based economy: from scientific to research excellence. European Journal of Higher Education, 6(3), 217–236.
Spicer, Z., Olmstead, N., & Goodman, N. (2018). Reversing the brain drain: where is Canadian STEM talent going? St. Catharine’s: Brock University.
Stephan, P. (2012). How economics shapes science. Cambridge, MA: Harvard University Press.
Stephan, P., Franzoni, C., & Scellato, G. (2016). Global competition for scientific talent: evidence from location decisions of PhDs and postdocs in 16 countries. Industrial and Corporate Change, 25(3), 457–485.
Teixeira, A. A. C., & Queirós, A. S. S. (2016). Economic growth, human capital and structural change: a dynamic panel data analysis. Research Policy, 45(8), 1636–1648.
Universities, U. K. (2017). The economic impact of international students. London: Universities UK.
Walker, I., & Zhu, Y. (2008). The college wage premium and the expansion of higher education in the UK. Scandinavian Journal of Economics, 110(4), 695–709.
Walker, I., & Zhu, Y. (2011). Differences by degree: evidence of the net financial rates of return to undergraduate study for England and Wales. Economics of Education Review, 30(6), 1177–1186.
Walsh, J. P. (2015). The impact of foreign-born scientists and engineers on American nanoscience research. Science and Public Policy, 42(1), 107–120.
Watson, W., Steward, W. H., & Bar Nir, A. (2003). The effects of human capital, organizational demography, and interpersonal processes on venture partner perceptions of firm profit and growth. Journal of Business Venturing, 18(2), 145–164.
Weitzman, M. L. (1996). Hybridizing growth theory. American Economic Review, 86(2), 207–212.
Winters, J. V. (2014). STEM graduates, human capital externalities, and wages in the U.S. Regional Science and Urban Economics, 48, 190–198.
Youtie, J., & Shapira, P. (2008). Building an innovation hub: a case study of the transformation of university roles in regional technological and economic development. Research Policy, 37(8), 1188–1204.
The authors thank Vivek Goel and Stephannie Roy for their insights and support. Sana Maqbool and Brendan Hills provided valuable research assistance throughout the project.
The authors acknowledge financial support from the Office of the Vice-President, Research and Innovation (OVPRI), University of Toronto.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Breznitz, S.M., Zhang, Q. Determinants of graduates’ entrepreneurial activity. Small Bus Econ 55, 1039–1056 (2020). https://doi.org/10.1007/s11187-019-00171-8
- Foreign education