Skip to main content
SpringerLink
Log in

Beyond incubation: an analysis of firm survival and exit dynamics in the post-graduation period

  • Published:
The Journal of Technology Transfer Aims and scope Submit manuscript

Abstract

With regard to the survival rates of business incubator (BI) firms, the literature mainly presents findings of failure rates only during the incubation period. Little is known about the survival or exit dynamics of firms after leaving the incubator facilities. This study approaches this research question by examining the survival of 352 firms from five German BIs after their graduation. The findings suggest that graduation causes an immediate negative effect on survivability that lasts up to 3 years after leaving the incubators. Furthermore, heterogeneous patterns of post-graduation exit dynamics between the BIs were observed. It was also found that performance during the incubation period is an indicator of the propensity of business closure after graduation. This study offers valuable insights and implications for all stakeholders of BI-initiatives.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Aernoudt, R. (2004). Incubator: Tool for entrepreneurship? Small Business Economics, 23, 127–135. doi:10.1023/B:SBEJ.0000027665.54173.23.

    Article  Google Scholar 

  • Aerts, K., Matthyssens, P., & Vandenbempt, K. (2007). Critical role and screening practices of European business incubators. Technovation, 27, 254–267. doi:10.1016/j.technovation.2006.12.002.

    Article  Google Scholar 

  • Allen, D., & Bazan, E. (1990). Value-added contribution of Pennsylvania’s business incubators to tenant firms and local economies. Report prepared for Pennsylvania Department of Commerce, Pennsylvania State University, University Park, PA.

  • Allen, D. N., & McCluskey, R. (1990). Structure, policy, services, and performances in the business incubator industry. Entrepreneurship Theory and Practice, 15, 61–77.

    Google Scholar 

  • Almus, M. (2002). What characterizes a fast-growing firm? Applied Economics, 34, 1497–1508. doi:10.1080/00036840110105010.

    Article  Google Scholar 

  • Almus, M., & Nerlinger, E. (1999). Growth of new technology-based firms: Which factors matter. Small Business Economics, 13, 141–154. doi:10.1023/A:1008138709724.

    Article  Google Scholar 

  • Autio, E., & Kauranen, I. (1992). The effectiveness of science parks as a tool of technology policy. Helsinki University of Technology Working Paper.

  • Bearse, P. (1998). A question of evaluation: NBIA’s impact assessment of business incubators. Economic Development Quarterly, 12, 322–333. doi:10.1177/089124249801200404.

    Article  Google Scholar 

  • Behrendt, H. (1996). Wirkungsanalyse von Technologie- und Gründerzentren in Westdeutschland. Heidelberg: Phyisica.

    Google Scholar 

  • Bergek, A., & Norrman, C. (2008). Incubator best practice: A framework. Technovation, 28, 20–28. doi:10.1016/j.technovation.2007.07.008.

    Article  Google Scholar 

  • Bigliardi, B., Dormio, A. I., Nosella, A., & Petroni, G. (2006). Assessing science parks performances: directions from selected Italian case studies. Technovation, 26, 489–505. doi:10.1016/j.technovation.2005.01.002.

    Article  Google Scholar 

  • Brixy, U., & Grotz, R. (2004). Regionale Muster und Determinanten des Gründungserfolgs. In M. Fritsch & R. Grotz (Eds.), Empirische Analysen zum Gründungsgeschehen in Deutschland (pp. 161–186). Heidelberg: Physica.

    Google Scholar 

  • Cleves, M. A., Gould, W. W., & Gutierrez, R. G. (2004). An introduction to survival analysis using stata (Revised Edition). College Station: Stata Press.

    Google Scholar 

  • Colombo, M., & Delmastro, M. (2002). How effective are technology incubators? Evidence from Italy. Research Policy, 31, 1103–1122. doi:10.1016/S0048-7333(01)00178-0.

    Article  Google Scholar 

  • European Commission. (2002). Benchmarking of business incubators: Final report. Centre for Strategy & Evaluation Services.

  • Ferguson, R., & Olofsson, C. (2004). Science parks and the development of NTBFs-location, survival and growth. The Journal of Technology Transfer, 29, 5–17. doi:10.1023/B:JOTT.0000011178.44095.cd.

    Article  Google Scholar 

  • Fiedler, H. (1988). Technologie- und Innovationspark Berlin: Entstehung, Status, Perspektiven. In N. Dose & A. Drexler (Eds.), Technologieparks: Voraussetzungen, Bestandsaufnahme und Kritik (pp. 294–307). Opladen: Westdt. Verlag.

    Google Scholar 

  • Freeman, J., Carroll, G. R., & Hannan, M. T. (1983). The liability of newness: Age dependence in organizational death rates. American Sociological Review, 48, 692–710. doi:10.2307/2094928.

    Article  Google Scholar 

  • Fritsch, M., & Mueller, P. (2004). Effects of new business formation on regional development over time. Regional Studies, 38, 961–975. doi:10.1080/0034340042000280965.

    Article  Google Scholar 

  • Geroski, P. A. (1995). What do we know about entry? International Journal of Industrial Organization, 13, 421–440. doi:10.1016/0167-7187(95)00498-X.

    Article  Google Scholar 

  • Glaser, A. (2005). Innovations-, Technologie- und Gründerzentren. In B. Falk (Ed.), Handbuch Gewerbe- und Spezialimmobilien (pp. 431–445). Köln: Müller.

    Google Scholar 

  • Grimaldi, R., & Grandi, A. (2005). Business incubators and new venture creation: an assessment of incubating models. Technovation, 25, 111–121. doi:10.1016/S0166-4972(03)00076-2.

    Article  Google Scholar 

  • Hackett, S. M., & Dilts, D. M. (2004). A systematic review of business incubation literature. The Journal of Technology Transfer, 29, 55–82. doi:10.1023/B:JOTT.0000011181.11952.0f.

    Article  Google Scholar 

  • Hannan, M. T., & Freeman, J. (1984). Structural inertia and organizational change. American Sociological Review, 49, 149–164. doi:10.2307/2095567.

    Article  Google Scholar 

  • Hannon, P. D. (2005). Incubation policy and practice: Building practitioner and professional capability. Journal of Small Business and Enterprise Development, 12, 57–78. doi:10.1108/14626000510579644.

    Article  Google Scholar 

  • Hannon, P. D., & Chaplin, P. (2003). Are incubators good for business? Understanding incubation practice—the challenges for policy. Environment and Planning C, 21, 861–881.

    Article  Google Scholar 

  • Hytti, U., & Mäki, K. (2007). Which firm benefit most from the incubators? International Journal of Entrepreneurship and Innovation Management, 7, 506–523. doi:10.1504/IJEIM.2007.014594.

    Article  Google Scholar 

  • Kaplan, E. L., & Meier, P. (1958). Nonparametric estimation from incomplete observations. Journal of the American Statistical Association, 53(Juni 1985), 457–481.

    Article  Google Scholar 

  • Kleinbaum, D. G. (1996). Survival analysis: A self-learning text. New York: Springer.

    Google Scholar 

  • Lawless, J.-F. (1982). Statistical models and methods for lifetime data. Chichester: Wiley.

    Google Scholar 

  • Lindelöf, P., & Löfsten, H. (2004). Proximity as a resource base for competitive advantage: University-industry links for technology transfer. The Journal of Technology Transfer, 29, 311–326. doi:10.1023/B:JOTT.0000034125.29979.ae.

    Article  Google Scholar 

  • McAdam, M., & Marlow, S. (2007). Building futures or stealing secrets? Entrepreneurial cooperation and conflict within business incubators. International Small Business Journal, 25, 361–379. doi:10.1177/0266242607078563.

    Article  Google Scholar 

  • Monck, C. S. P., Porter, R. B., Quintas, P., Storey, D. J., & Wynarczyk, P. (1988). Science parks and the growth of high technology firms. London: Croom Helm.

    Google Scholar 

  • Peña, I. (2004). Business incubation centers and new firm growth in the Basque Country. Small Business Economics, 22, 223–236. doi:10.1023/B:SBEJ.0000022221.03667.82.

    Article  Google Scholar 

  • Peters, L., Rice, M., & Sundararajan, M. (2004). The role of incubators in the entrepreneurial process. The Journal of Technology Transfer, 29, 83–91. doi:10.1023/B:JOTT.0000011182.82350.df.

    Article  Google Scholar 

  • Phan, P. H., Siegel, D. S., & Wright, M. (2005). Science parks and incubators: Observations, synthesis and future research. Journal of Business Venturing, 20, 165–182. doi:10.1016/j.jbusvent.2003.12.001.

    Article  Google Scholar 

  • Rice, M. P. (2002). Co-production of business assistance in business incubators: An explorative study. Journal of Business Venturing, 17, 163–187. doi:10.1016/S0883-9026(00)00055-0.

    Article  Google Scholar 

  • Rothaermel, F. T., & Thursby, M. (2005a). Incubator firm failure or graduation? The role of university linkages. Research Policy, 34, 1076–1090. doi:10.1016/j.respol.2005.05.012.

    Article  Google Scholar 

  • Rothaermel, F. T., & Thursby, M. (2005b). University-incubator firm knowledge flows: Assessing their impact on incubator firm performance. Research Policy, 34, 205–320.

    Google Scholar 

  • Schwartz, M., & Hornych, C. (2008). Specialization as strategy for business incubators: An assessment of the Central German Multimedia Center. Technovation, 28, 436–449. doi:10.1016/j.technovation.2008.02.003.

    Article  Google Scholar 

  • Seeger, H. (1997). Ex-Post-Bewertung der Technologie- und Gründerzentren durch die erfolgreich ausgezogenen Unternehmen und Analyse der einzel- und regionalwirtschaftlichen Effekte. Münster/Hamburg: Lit-Verlag.

    Google Scholar 

  • Sherman, H., & Chappell, D. S. (1998). Methodological challenges in evaluating business incubator outcomes. Economic Development Quarterly, 12, 313–321. doi:10.1177/089124249801200403.

    Article  Google Scholar 

  • Steinkühler, R. H. (1994). Technologiezentren und Erfolg von Unternehmensgründungen. Wiesbaden: DUV.

    Google Scholar 

  • Sternberg, R. (1988). Technologie- und Gründerzentren als Instrument kommunaler Wirtschaftsförderung – Bewertung auf der Grundlage von Erhebungen in 31 Zentren und 177 Unternehmen. Dortmund: Dortmunder Vertrieb für Planungsliteratur.

    Google Scholar 

  • Sternberg, R. (1992). Methoden und Ergebnisse der Erfolgskontrolle von Technologie- und Gründerzentren. In Niedersächsisches Institut für Wirtschaftsforschung (Ed.), Erfolgskontrollen in der Technologiepolitik (pp. 89–115). Hannover.

  • Stinchcombe, A. L. (1965). Social structure and organisations. In J. G. March (Ed.), Handbook of organizations (pp. 142–193). Chicago: Garland.

    Google Scholar 

  • Storey, D. J., & Strange, A. (1992). Where are they now? Some changes in firms located on UK Science Parks in 1986. New Technology, Work and Employment, 1, 15–28. doi:10.1111/j.1468-005X.1992.tb00017.x.

    Article  Google Scholar 

  • Strotmann, H. (2007). Entrepreneurial survival. Small Business Economics, 28, 87–104. doi:10.1007/s11187-005-8859-z.

    Article  Google Scholar 

  • Studdard, N. L. (2006). The effectiveness of entrepreneurial firm’s knowledge acquisition from a business incubator. The International Entrepreneurship and Management Journal, 2, 211–225. doi:10.1007/s11365-006-8685-z.

    Article  Google Scholar 

  • Tamásy, C. (2002). Are there too many innovation centres in Germany? In L. Schätzl & J. R. Diez (Eds.), Technological change and regional development in Europe (pp. 112–131). Heidelberg: Physica.

    Google Scholar 

  • Tamásy, C. (2005). Determinanten des regionalen Gründungsgeschehens. Münster: Lit-Verlag.

    Google Scholar 

  • Voisey, P., Gornall, L., Jones, P., & Brychan, T. (2006). The measurement of success in a business incubation project. Journal of Small Business and Enterprise Development, 13, 454–468. doi:10.1108/14626000610680307.

    Article  Google Scholar 

  • Von Zedtwitz, M., & Grimaldi, R. (2006). Are service profiles incubator-specific? Results from an empirical investigation in Italy. The Journal of Technology Transfer, 31, 459–468. doi:10.1007/s10961-006-0007-7.

    Article  Google Scholar 

  • Weinzimmer, L. G., Nystrom, P. C., & Freeman, S. J. (1998). Measuring organizational growth: Issues, consequences and guidelines. Journal of Management, 24, 235–262. doi:10.1016/S0149-2063(99)80061-0.

    Article  Google Scholar 

  • Westhead, P., & Batstone, S. (1999). Perceived benefits of a managed science park location. Entrepreneurship and Regional Development, 11, 129–154. doi:10.1080/089856299283236.

    Article  Google Scholar 

  • Westhead, P., & Storey, D. J. (1994). An assessment of firms located on and off science parks in the United Kingdom. Main report. London: HMSO.

    Google Scholar 

  • Willms, W., & Sünner, I. (2004). Langfristige regionalwirtschaftliche Effekte von Technologie- und Gründerzentren. Neues Archiv, 1(2004), 27–38.

    Google Scholar 

  • Woywode, M. (2004). Wege aus der Erfolglosigkeit der Erfolgsfaktorenforschung. In Kf W Bankengruppe (Ed.), Was erfolgreiche Unternehmen ausmacht: Erkenntnisse aus Wissenschaft und Praxis (pp. 15–47). Heidelberg: Physica.

    Google Scholar 

Download references

Acknowledgements

The author is particularly grateful to the Journals anonymous reviewer for valuable comments and suggestions, to Jutta Günther and Martin T. W. Rosenfeld for helpful remarks on earlier versions of this article, and to the management staff of the five Business Incubators for the absolute support during all stages of this research project. Moreover, I would like to thank the Creditreform for the pleasant cooperation and helpful support.

Author information

Authors and Affiliations

  1. Department of Urban Economics, Halle Institute for Economic Research, P.O. Box 11 03 61, 06017, Halle (Saale), Germany

    Michael Schwartz

Authors
  1. Michael Schwartz
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Michael Schwartz.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Schwartz, M. Beyond incubation: an analysis of firm survival and exit dynamics in the post-graduation period. J Technol Transf 34, 403–421 (2009). https://doi.org/10.1007/s10961-008-9095-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10961-008-9095-x

Keywords

JEL Classifications

Search

Navigation