University spin-offs vs. other NTBFs: Total factor productivity differences at outset and evolution

•We present a longitudinal analysis comparing the capabilities (total factor productivity) of University Spin-offs and other NTBFs.•University spin-offs report lower substantive capabilities but larger dynamic capabilities.•In the long term, University spin-offs are more productive than other NTBFs.•Of the alternative explanations considered, the argument that academic entrepreneurs learn faster is the most consistent with the evidence presented.

Previous empirical research suggests that university spin-offs under-perform in economic terms compared to other new technology-based firms (NTBFs) in their early years. The usual explanations suggest a lower capabilities endowment of university spin-offs compared to other NTBFs. Using a longitudinal Spanish dataset we compare the evolution of firms′ total factor productivity (capabilities endowment) in both kinds of firm. Productivity grew faster in university spin-offs and their initial underperformance disappeared after 2 or 3 years of operation. The evidence therefore suggests that university spin-offs have lower initial substantive capabilities but greater dynamic capabilities than independent NTBFs. Possible explanations are discussed.