University-incubator firm knowledge flows: assessing their impact on incubator firm performance

Technology incubators are university-based technology initiatives that should facilitate knowledge flows from the university to the incubator firms. We thus investigate the research question of how knowledge actually flows from universities to incubator firms. Moreover, we assess the effect of these knowledge flows on incubator firm-level differential performance. Based on the resource-based view of the firm and the absorptive capacity construct, we advance the overarching hypothesis that knowledge flows should enhance incubator firm performance. Drawing on longitudinal and fine-grained firm-level data of 79 technology ventures incubated between 1998 and 2003 at the Advanced Technology Development Center, a technology incubator sponsored by the Georgia Institute of Technology, we find some support for knowledge flows from universities to incubator firms. Our evidence suggests that incubator firms' absorptive capacity is an important factor when transforming university knowledge into firm-level competitive advantage.