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Palma, September 2007 II IBEW

Research Efficiency Analysis in a System of University Technology Transfer Offices: An Empirical Analysis of the Spanish Case

DEMO Student: Maria Victoria Trujillo1 Tutor: Dr. Emili Grifell-Tatje Co-tutor: Dr. Pablo Arocena

Abstract

The phenomenon of TTOs in Spain is relatively new and there is a need of assessing their efficiency. In this sense, we present quantitative evidence on the level of efficiency of 50 Spanish TTOs for the period 2003-2005. An important methodological inside of the paper is the introduction of SFE with multi-output approach: Licenses and Spin-off. Our results suggest that an increment of invention disclosure and TTO size entails an increment of the commercialization in the form of patents, licenses and Spin-off. Even though the evidence is weak, we also point out that public and technical universities have higher commercialization with respect to their counterparts, finally we find neither experience nor industrial cluster effects in Spanish TTOs.

Key Words: TTO, Technical efficiency, SFE, Licenses, Spin-off JEL Codes: C23, D23, O31, O32.

We would like to thanks, the REDOTRI Universidades who kindly lend us the data set of the questionnaires of the years 2003, 2004 and 2005, and specially to Susana Camara. We also want to thank the TTO of the UAB and especially to Angela Serrano who gave us an interview to define the process of technology transfer in Spain.

1. Introduction.

The amount of innovation commercialized from the universities has increased dramatically (Nelson, 2001; Mowery et al., 2001), not only in the US, also in other countries where Universities have the same structure of ownership and decision rights. This is the case of Spain (Geuna, et al., 2003). This phenomenon started with The BayhDole Act (1980) and the 1986 Federal Technology Transfer Act which moved the property and commercialization rights on inventions achieved from federally funded research to the universities. From then, the commercial success and the commercialization of research is an important option to create wealth from universities (Etzkowitz, 1998; Shane, 2002). It also has gone with an increasing interest of academics about the role of University Transfer Technology Offices (TTO). This phenomenon started in Spain almost 20 years ago with the First National Plan. Consequently, most of the Spanish TTOs have achieved enough experience transferring technology to the market and hence their efficiency might be analyzed in depth.

In order to study their efficiency two methodologies are used in the literature. Firstly, a non-parametric approach (Thursby and Kemp, 2002) well known as Data Envelopment Analysis (DEA), and secondly a parametric approach (Siegel, et al., 2003) called Stochastic Frontier Estimation (SFE). The second method gives statistical information about the impact of independent variables but has the limitation when a multi-output approach is required. We have made the effort of introducing a model of two outputs: Licenses and Spin-off. Some of the results presented in the work are consistent with previous research. In short, an increment of the inputs increases the amount of commercialization done. Additionally, public and technical universities seem to be more efficient (Siegel, et al., 2003). Besides, in contrast with Siegel et al., (2003) we found neither experience nor cluster effects.

The order of the paper is as follows. In the next section, an extensive review of international literature on the topic is done. In the third section, we analyze the specificities of the Spanish system and develop the hypothesis. Subsequent sections present data and results. Finally, concluding remarks close the work.

2. University to Industry Technology Transfer: a global review In a more global view we can understand technology transfer as the process of innovation that is presented, as the transference of intellectual capital and know-how between organizations with the purpose to be used in the creation and development of products and services commercially viable. (Rubiralta, 2003). Technology transfer is usually thought of, as occurring within or across firms (Siegel, et al., 2003) such information transfer is from one firm or institution to another, from one employee of one division to another (intra-firm transfer of technology) or to one country to another. Insert Figure 1 -

The university to industry technology transfer or commercial transfer of scientific knowledge from universities to firms has been a topic of interest in the literature since the last decades (see Figure 1). In the following section we will review this literature that can be divided under the following subjects: 2.1 Historic perspective, growth in academic innovation transferred to the market before and after Bayh-Dole Act of 1980 and statistics. 2.2 Ownership and licensing. 2.3 International and Regional comparisons through case studies. 2.4 Outputs of university research. (patents, licenses, spin-offs) 2.5 Efficiency of university Technology Transfer Offices. (TTOs). 2.1 Historic Perspective, Growth in academic innovation transferred to the market before and after Bayh-Dole Act of 1980.

The University is an institution born in the XII century, with the mission to distribute knowledge from professor to students, until the XIV century. In the XV and the XVI centuries a declivity stage starts that continued all along during the XVII and XVIII centuries, giving the role of knowledge and research to technical societies and academies that made scientific research according to the needs of a society that was becoming more technical. But the inefficiency of this societies and academies to organize themselves in specialized ways, cause the reborn of the universities in the XIX

century, when Van Humboldt propose a new model were is combined the already known educational function with a new function: research (Santamaria, et al., 2007).

The U.S research university and the organized pursuit of R&D in industry both originated roughly 125 years ago, have grown in parallel throughout the 20th century (Mowery and Rosenberg, 1998). Even though the research cooperation between universities and the industry has a long story, recent changes like growth of university patenting and licensing of new technologies to private firms, have concerned considerable the attention of researches.

In 1810, the University of Berlin is founded and is the leader of change of many other universities in the medieval era and also the inspiration to create new ones (Geuna, et al., 1999). During XIX century many universities especially the American ones were connected with the necessity to develop the local industry, offering guidance and solving the practical problems of the industry. Before World War II, which supposed an in flex point in the history of the science and the industry when the role of the university starts to change, mainly in the American universities, with their relation with the industry. During the war, the best scientists and technologists were incentive to create, promoting big advances in fields like medicine and nuclear engineer. Projects like the Manhattan one (atomic bomb) were the result of those efforts (Santamaria, et al., 2007). At this point its important to recall the Vannevar Bush inform, Science: the Endless Frontier, (1945) because when Bush was the director of the research and development office in the U.S during the war; he established the need to finance the scientific activities after the war and the importance of the basic research in the universities. He established a model of the process of innovation that has been identified as the linear model, were the basic research is considered as the source of technological innovation. The increases in university patenting and licensing are frequently asserted to be directed consequences of the federal policy initiative known as the Bayh-Dole Act of 1980 (Mowery, et al., 2001). This federal policy gives the ownership of commercialization of federal funded research to universities. This right is usually managed by the Technology Transfer Office (TTO). The Bayh-Dole act has increased dramatically the commercialization of academic innovation. Godfarb and Henrekson, (2003) give partial evidence to this fact. They compare the case of Sweden where the right of selling the 4

intellectual property belong to the inventor, with the case of US, where the right of commercialize the intellectual property belong to the university and exploit these resources through the figure of the TTO. They conclude that having Sweden a higher relative amount of researchers than US, the income generated by licenses is relatively larger in US, and therefore the ownership of the decision right for the University and the presence of the TTO bring to a more efficient technology transfer process. This process has not only been taking place in the US, but also in other countries where Universities have the same structure of ownership and decision rights about inventions, like Spain, Italy or UK (Geuna, et al., 2003). Before the Bayh-Dole act2, U.S. public universities in the period from 1900s to 1940s looked for the collaboration in great spread of research within the industry. The Second World War transformed the role of U.S. universities as research performers, as well as the sources of their research funding. Then during 1950s-1960s periods, the share of industry findings declined because of great budgets of post war. During the 1960s the National Science foundation allowed academic institutions to patent and license the results of their research under the terms of Institutional Patent Agreements (IPAs). Beginning in the 1970s, the share of industry funding within academic research began to grow again. Most of the increase in industry funding occurred during the 1980s, remaining roughly constant after 1990. The Bayh-Dole act is contemporaneous with a sharp increase in U.S university patenting and licensing activity (Mowery, et al., 2001). Table 1 reveals the large increase. - Insert Table 1 2.2 Ownership and Licensing

Universities ownership structure has two important players in the role of technology transfer; one is the university, which many authors had claimed to have a new role in society with respect to commercialization of research results, or entrepreneurial science (Etzkowitz, 1998; Martin, 2003); and two is the universitys scientist or

To know more about USA patenting activity before 1980 see the National Science and Foundation Board Indicators. U.S. Government.

inventor. From the university perspective, the challenge becomes: to increase the extent of commercialization, to visualize the contribution to economic development, and to manage the relationship between commercialization and other core activities. Rasmussen, et al., (2006), says that in addition to teaching and research, universities are increasingly expected to take on technology transfer and commercialization as part of their mission. They explore the initiatives provided by the universities to promote commercialization of university knowledge. McAdam, et al., (2005) construct a model with this initiatives analyzing licensing and business building process and suggest this approach to innovation centers. The University Scientist or inventor has an academic culture and it carries with an ambiguous relationship to commercial innovation and a preference for basic research (Ndonzuau, et al., 2002). Most of his career recognition, and consequently compensation, comes from his success in the basic research, therefore it is a clear, and in some cases important, opportunity cost for the development of commercial innovation. Aghion, et al., (2005) develop a model that clarifies the respective advantages and disadvantages of academic and private-sector research and they also examine when in the process of technological transfer is optimal to make the transition from academia to the private sector. They found that innovative ideas can be recognized by the private sector in a more early-stage. More recently Lowe, (2006) proposes a theoretical model that shows how the inventor know-how affects the decision to license his invention for development or star a spin-off with his invention. Since the passage of the Bayh-Dole Act, proponents of this legislation argue that industrial use of federally funded research would be reduced without university patent licensing. This issue means if the commercial application and diffusion of inventions from federally funded research critically depends upon allowing universities to retain title to and license them. Jensen and Thursby, (2001), address this issue providing evidence of 62 U.S universities analyzing several related theoretical models. Behind a moral-hazard framework, and taking into account that the effort of the inventor is not observable, they stated that no development of an invention will be made unless inventors receive incentive such as royalties or equity. Besides, following the framework where firms have incomplete information of the quality of the inventions Macho-Stadler, et al., (2005) developed a theoretical model explaining the specific role of TTOs in licensing university inventions. They say that beyond the classical economies of scale, a university wide TTO can be an instrument to reduce the 6

asymmetric information problem found in the scientific knowledge market. They consider a model of technology transfer between a research institute (university) and the industry (firm) and in parallel they develop a reputation argument for a Technology Seller (TTO). Consequently TTOs exist as they reduce asymmetries of information between academic entrepreneurs and established firms. Ownership, income splits, stage of development, marketing, license policies and characteristics, goals of licensing and the role of the inventor in licensing are studied by Thursby, et al., (2001), as they describe their survey of licensing at 62 research

universities. Their most relevant find is that additional disclosures generate smaller percentage increases in licenses, and those increases in licenses generate smaller percentage increases in royalties. 2.3 International and Regional comparisons through case studies

There have been also a lot of studies comparing different approaches in the international arena like the case of Goldfarb and Henrekson, (2003), as mentioned before, that compare a subset of policies of the US and Swedish innovation systems that affect the commercialization of university technology. Owen-Smith, et al., (2002) compared US and European practices in terms of university industry relations.

Feldman, et al., (2002), explore also policy issues but in a regional perspective, using data from U.S Carnegie I and Carnegie II universities. They estimate a model were they consider equity as technology transfer mechanism and found that offers advantages to university in revenues and ownership interests. Bercovitz, et al., (2001) studied the influence of university organizational structure on technology transfer performance. They treat the structure of the TTO as an independent variable that accounts, in part, for measured inter-institutional differences in patenting, licensing, and sponsored research activities. Using prior theories of distinct forms of organizational structure: U-Form, MForm and H-Form3; they analyze three major research universities John Hopkins University, Pennsylvania State University and Duke University. They found that the

For more details about this three forms of organizational structure see the studies of Chandler (1990) and Williamson (1985).

three universities differ in their organizational structure4 and that this structure affects performance in a predictable manner.

Di Gregorio and Shane, (2003) analyze cross-institutional variations in new firms formation rates between university licensing offices (TLOs) over the 94-98 periods, in other words they explore empirically why some universities generate more start-ups than others. They say that several major recognized corporations had their origins as TLO start-ups, thats why they are an important mechanism for economic activity. Colyvas, et al., (2002) studied cases of commercialization of technologies. Feller, et al., (2002), studied ways in which academic R&D and education contribute to industrial innovation. Beise and Stahl, (1999), find that in Germany high-technology does not depend on co-location of public and private research.

Other studies focused on individual cases to explore similar issues. Zucker, et al., (2002) in a biotechnology case study looked at the efficiency of university technology transfer process. Goldhor and Lund, (1982) made a study case of Massachusetts Institute of Technology (MIT) that examines the events in the transfer on an advanced technology (a text-to-speech reading machine) from the university to an industrial firm seeking to exploit the innovation. They suggest important policy making issues and important implications that latter gave birth to TTOs. 2.4 Outputs of University Research (patents, licenses, spin-offs)

The studies that focus on the outputs of the university research are widely focused on spin-offs companies. The development of spin-offs is analyzed by Vohora, et al., (2004) they say that spin-offs has to pass through 5 phases of development in order to be a successful venture. Clarysse, et al., (2005) explore the different incubation strategies for spinning-out companies employed by European Research Institutes. They use a two-stage approach where three distinct incubation models of managing the spinout process where identified: Low selective, Supportive and Incubator. Leitch and Harrison, (2005) explore the spin-offs with a study case and they also examine the role

More specifically they found that John Hopkins most closely aligns with the H-Form, Duke with the U-Form and Pennsylvania has created an M-Form.

of the TTO in this context. They suggest that TTO should be assumed in a more economic developer role.

Locket, et al., (2003) made a comparison of two groups of universities in the U.K. They identify that more successful universities tend to create new ventures were the equity is divided more equally between the TTO, the venture capitalist and the academic entrepreneur. Chukumba and Jensen, (2005) develop and empirically tested a gametheoretic model that explains why a university invention is commercialized in a spin-off rather than in an established firm. The most relevant conclusion for the literature is that they proof that when the invention, specially engineering, is of high quality universities license more. And when the quality of the inventions is low universities make spin-offs.

In the U.S, legislative support to university patenting of federally funded research results was largely motivated by expectations that such a policy would increase the level of industry R&D; Mazzoleni, (2006) presents a theoretical model of R&D competition based on a university invention. Patenting and licensing are studied. They found that the results on patenting and licensing derive in increase of R&D investment and social welfare, but they suggest this should be tested empirically. Macho-Stadler, et al., (1996) analyze terms of contracts in licensing agreements, between Spanish and foreign firms. They found that royalties are relative more important in contracts that transfer knowhow, and they explain this proposing a theoretical model where know-how is hard to quantify so its difficult to include in a contract. 2.5 Efficiency of University TTOs

There have been a group of studies focusing on the use of tangible outputs to measure the efficiency of TTOs. Markman, et al., (2005) studied the variable speed in 95 U.S university technology transfer offices (UTTOs) and they find that faster UTTOs can commercialize patent-protected technologies, greater licensing revenues and generate more spin-offs. Chapple, et al., (2005) present evidence on the performance of TTOs in the U.K. using Data Envelopment Analysis (DEA) and Stochastic Frontier Estimation (SFE). They found that there is a need to increase capabilities and business skills of TTO managers.

A series of studies built model to establish efficiency metrics and measure relative productivity. Siegel, et al., (2003) present quantitative analysis of efficiency, measuring the relative productivity of TTOs in the U.S using SFE measures. Their findings suggest that TTO activity is characterized by constant return to scale and the variation in performance is explained by environmental factors they use. They also present some qualitative analysis. Thursby and Kemp, (2002) explore the increase in licensing activity of U.S universities focusing on efficiency; employing DEA combined with regression analysis. They find that licensing activity had increased over the years by others factors than the relative size of the university. Anderson, et al., (2007) use a DEA approach to examine efficient and inefficient TTOs within U.S. universities. As a result efficiency in TTOs is found in many leading universities. Siegel and Phan, (2004) analyze and describe the most important tools DEA and SFE as the most used technique tools of evaluation. 3. Spanish legal environment and the Spanish Situation

3.1 TTO: Origin, Concept and Nature

The theoretical analysis of the process of technological transfer and its connection with economical growth is relatively new. Economic theory had always intuited the importance of innovation and its effects in economic growth, but its until the decades of the 1950 through 1960 that this variable started to be considered as exogenous. The first theories not only had demonstrated the significant effect of innovation in productivity, but also, they had demonstrated the existence of failures in the transference of it to the market.

In the Spanish context, the public initiatives of promotion of innovation arrive with remarkable delay with respect to other countries with stronger economies5. One of the first laws, the Organic Law 11/1983 (LOU)6, where its principal objective is to regulate the emerging relationships between the university and the firms, makes the role of the first one, as the dynamic element of the innovative process. But the policies of R&D in Spain have their in-flex point until 1986 when the law of Science 13/19867, takes effect.
5 6

OTRI: entre la relacin y el mercado. Available in www.redotriuniversidades.net, Biblioteca, Libros, Capitulo 2. Ley Orgnica de Reforma Universitaria del 11/1983. 7 Ley de Fomento y Coordinacin General de la Investigacin Cientfica y Tcnica del 13/1986.

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Until this date, we cannot talk about the existence of a scientific and technological policy. This law defines a new organizational framework where the most important instrument of planning and execution would be the National Plan of R&D8 that would be implemented, followed and coordinated by the Inter-ministerial Commission of Science and Technology (Comisin Interministerial de Ciencia y Tecnologa-CICYT-). The law of Science in its 5 article says: that one of the objectives of the National Plan of R&D is to promote research and development activities within the firms and the collaboration between the firms and the public centres of research (law 13/86). In this context, at the end of 1988, with the beginning of the first National Plan of R&D 1988 1991, starts-up the program of creation of the TTOs9 (in Spain Oficina de Transferencia de Resultados de Investigacin-OTRI).

Following the previous approach of the Spanish context and the increasing flow of new technologies in the recent scenario is important to view in a more general view the process of technology transfer in two perspectives: (Rubiralta, 2003) the transference that is produced between firms (horizontal transference) and the transference that is developed between the agents (universities and public organisms) that are generators of knowledge and the industry (vertical transference). The principal objectives of the TTO are as follows (Conesa, 1997):

To elaborate the databank about the infrastructure and the supply of R&D. To identify the transfer of results generated by the active groups of investigation and to directly spread them between the firms or in collaboration with the next units of interface.

To facilitate the transference of those results to the firms, or in other case, the correct assimilation of foreign technologies.

To collaborate and participate in the negotiations of the contracts of research, technical assistance, consultancy, license of patents, etc., between the groups of research and the firms.

To manage, with the support of the respective administrative teams, the contracts to carry out.

8 9

Plan Nacional de I+D Espaa. To see the evolution and the way that have followed the Spanish TTOs until now see the documents of CICYT of 1989.

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To inform about the European programs of R&D and to facilitate technically the elaboration of the projects, and also to manage the transaction of such a projects.

The first empirical study about the Spanish TTOs showed that they were very good welcome and start to spread widely, but they well in that moment in process of consolidation (Fernandez de Lucio y Conesa, 1996), because of their small size (2 technicians and 2 support persons) and they were more oriented to the university only, which the authors qualified as a default in the mission to consolidate the relations between universities and firms. Rubiralta, (2005) in his study found that the weakness in the productivity growth in Spanish regions has generated a low technological demand of universities R&D, making the TTOs to establish new strategies and goals. MachoStadler, et al., (1996) analyze the contract terms of licensing agreements between Spanish and foreign firms and found empirical evidence that royalties are relative more important in contracts that transfer know-how. The intuition behind this is that because know-how is hard to quantify and cannot be included in a contract, therefore, the license agreement would be more credible when the scientist is interested in transfer know-how and his profits depends on the sale of the license. Serarols, et al., (2007) analyze the evolution, objectives, resources and activities of a specialised unit Technological Trampoline and create some implications and recommendations to both university and TTOs.

Perez-Castrillo, (2005) says that one of the weaknesses of the TTOs is that, besides the high enrolment of administrative employees, they should hire professionals highly qualified, that can be able to establish a connexion between firms and the specialized group of scientists researchers. The intuition behind this is that the participation of the researchers in the process of technology transfer is crucial, and to make this happen is important that the TTO foments an incentive scheme that enforce the invention disclosure and the collaboration of the research group with the firm that signs a license contract. Following this approach we can derive our first empirical hypothesis10 for our work:

10 Notice that this approach is consistent with the work of Jensen and Thursby (2001) and Jensen et al. (2003) presented in the previous section.

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Hypothesis 1: The more the number of invention disclosures more commercialisations (patents, licenses and/or spin-offs) will be done.

As we announced before Macho-Stadler, et al., (2005) suggest that the main objective of the TTOs is to reduce asymmetries of information between parties, it is worth to notice that to accomplish this objective the TTOs must achieve a critical size in order to be able to build a reputation11. The intuition behind this is; if the TTO has a work force big enough to control the flows of inventions that arrive constantly they can control the quality of commercial inventions they offer to the industry and this is transformed into higher reputation. We construct our second hypothesis from this statement:

Hypothesis 2: The size of the TTO is important to achieve a degree of efficiency.

Vendrell and Ortin, (2006) explore the process of technological transfer from universities. As a result they develop empirical implications. In particular they suggest that more efficient TTOs help to increase the number of commercial innovations12. Following this intuition we can develop our third hypothesis:

Hypothesis 3: More efficient TTOs help to increase the number of commercial innovations. We expect a positive relation between efficiency and the amount of inventions commercialized.

3.2 Situation of the Spanish TTOs

In Spain, as in other countries there has been an increase, but in a medium rate, in Spanish universities patenting and licensing activity. The actual society has been demanding the university a deeper commitment with the economy of the country; claiming a higher involvement of the institution that traditionally has only been academic. This new involvement is what Rubiralta, (2003) called technology transfer that know is part of the mission of the new roll of the universities.

11 12

Extracted from Vendrell and Ortin (2006) implication 2 (page 11). Siegel et al. (2003) in their results support this empirical implication for the U.S.A case.

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According to the 2006 annual Survey of RedOTRI Universidades one of the most important indicators to measure the degree of interaction between the university and industry is the number of contracts of R&D signed. We can see the evolution in Graphic 1. Insert Graphic 1 -

One of the traditional indicators of reference to measure the degree of interaction between the university and the R&D firm is the quantity and the nature of the contracts. With the data available by the RedOTRI, we can observe a tendency of rise in the total volume of hiring, measure in euros, for the activities of R&D, consultancy or technical services and other agents as shown in Graphic 1.

In other hand, the evolution of University patents also shows an important increase in the last years, with a growth of almost 50% in only three years (see Graphic 2). The international extensions have increasingly growth in the same interval of time which shows a major interest of obtaining more utilities from the inventions disclosed. But also shows that in spite of the effort, the bet for the international extension in the Spanish arena is still growing.

Insert Graphic 2 -

On of the most relevant items to reflect the increase in the patenting activity in the Spanish university is the license agreements (see Graphic 3). In the last three years the number of license agreements has been almost tripled, in the year 2005, 106 license agreements were signed.

Insert Graphic 3 -

The income generated by license agreements (see Graphic 4) have multiplied in the last years, but its interesting to note that the volume of income generated by these agreements do not evolve as expected, which indicates that it is not exploited in its maximum of possibilities.

Insert Graphic 4 14

Finally, another important aspect in the transference of technology is the university based off firms or spin-offs (see Graphic 5). In Spain this aspect is still in an embryonic stage in spite that there have been a lot of initiatives that are starting up from different approaches.

Insert Graphic 5 -

According to the data of the RedOTRI Universidades, in the year 2001 only 39 spin-offs were created but after the 2003 the growth has been constant. There is a regular creation of around 90 Spin-offs per year. 4. Determinants of the Process of University to Industry Technology Transfer

4.1 Internal Inputs, External Outputs and Environmental Factors.

In terms of organizational structure, the existence of a TTO inside a university is shown as a fundamental instrument for the development of good relations with the industry (Perez-Castrillo, 2005). In order to define the suitable inputs in the process of technology transfer from a university to a firm or entrepreneur it is important to describe the principal steps of this process for universities that have a TTO. First we would make a description of the process as follows taking into account the wisdom of specialized administrative personnel13 and the literature. We will focus in the transference of technologies through a license contract. This linear model (see figure 1) does not represent that all technologies are transferred in the same way in all Spanish universities this can be a topic for further research. The steps that follow the process of transference of technologies that results in a spin-off or start-up are very similar14.

Insert Figure 1 -

The first step, necessary to transfer knowledge, is the research of innovations. This process is done in laboratories or departments that are in charge of groups that work in
The interview was made in the TTO of the UAB to the person in charge of contracts and licence agreements. If you want a more detail specification of the steps for the creation of a spin-off or start-up that is of a result from an exploited innovation see Vendrell and Ortin (2006).
14 13

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the same research line. This is generally a decentralized process where the researcher is free to make research in those lines of his/her interest ( more near to their knowledge areas) or that are considered more promising. In any case the lines of interest in research are influenced by the possibility of obtaining financial aids.

The second stage of the model is the scientific discovery. When a group of researchers find an innovation is fundamental that the university have knowledge that the innovation exists. In this second stage, the TTO staff must encourage the scientific members to disclose the inventions. Besides the decentralization in the process of research, the knowledge that the innovation exist cannot be supposed. There should be a system of information transmission from the research group to the TTO, and this is what we know as invention disclosure.

Once the invention is formally disclosed, the TTO in the third stage with a specialized team evaluates the potentiality of the technology and decides whether to patent or not the innovation. If the TTO considers that the innovation represents a step forward in the scientific arena and its possible it has a commercial value, they will start the transaction to obtain a patent that protects the innovation. The origin of the regulations of the universities technology transfer starts with the approval of Bayh-Dole Act in the United States. Its prime objective was to stronger the interaction between the universities and the industry, the result of this law was that the universities, by the figure of the TTO, could retain the property of the technologies and grant licenses on them to companies, always giving preference to the PYMES. In Spain the Foundation University-Industry (FUE Fundacin Universidad Empresa) and the TTO have been contributing for years to facilitate the collaboration in this sector. The Organism that regulates in Spain the FUE and the TTO is the RED OTRI. The RED OTRI has its roots when the National Plan of Scientific Research and Technological Development (PNID) start activities (1988).

Its very important to take into account that to request and maintain a patent is very expensive and the TTO have limited resources to fill; thats why only potential innovations or the interest of the industry in the technology are the only criteria that are taken into account. Then the university decides to apply to domestic or international patent protection. 16

If the patent is awarded, then in the fourth stage of the process the TTO would often attempt to market the technology, and the scientific members are involved in the marketing process because their technical knowledge makes them a natural partner for the firms. The TTO would search for potential buyers to license the technology. The most active and wide experienced TTOs that usually are the big ones, making the size of the TTO an important input, usually are the ones that have a portfolio of possible clients. But the researcher is usually a very important source of information of the industry because usually they know firms that work and commercialise with these products. In the webpages of the Spanish TTOs there is only information of the available patents. Jensen and Thursby, (2001) report in their study, and Siegel et al (2003) confirmed in their field research, that many firms will license a technology before it is patented. This means that a key input of the university to industry transfer is invention disclosure, because is the portfolio of available technologies for licensing.

In the final stage of the model if a firm or individual entrepreneurs are interested in the patent, also the TTO is the one in charge to negotiate and redact a contract or license agreement for the transference of technology. This process can also derive in the constitution of a spin-off or start-up but this is sub stage (Chukumba and Jensen, 2005).

In resume we assume that the following internal factors are inputs of the university to industry technology transfer: invention disclosure, and the size of the TTO (labour employed by the TTO). And that the following external factors are outputs: Licence agreements, and patents. This would be our TTO production function where the inputs are under the control of the producer in this case the TTO director.

The technology transfer activity may also depend on some institutional factors. For example, being near an industrial zone may facilitate the commercialization of innovations. For instance we can recall the case of Standford University being near an industrial cluster like Silicon Valley15 or for the case of Spain the great industrial clusters are located in the big cities like Barcelona, Madrid, etc. Another important factor is the public status of the university. Private universities may have less rigid policies and public universities may have more financial aids from the state. The year of
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For more information about Silicon Valley see Hayes (1989).

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creation of the TTO or its age can be a relevant factor too. We can assume that TTO with more experience may be more efficient that the young ones.

5. Data Construction

Our data is based on the RedOTRI survey for the years 2003, 2004 and 2005. We complement this information from data of a survey made by DGPYME and ICO16 to the different to several TTOs and some Webpage information of some TTOs we needed to complement information17. We could cover a complete and balanced panel for 50 Spanish universities18 over the period 2003-2005. We also conduct an in depth interview with a responsible of the TTO of the Autonomous University of Barcelona, our objective was to understand the objectives of the Spanish TTOs. We consider university outputs19 of the TTOs those that imply the commercialisation of one invention previously developed in the University. In this sense, we differentiate in two different outputs. The Licenses are the sum of patents and licenses and are considered the commercialisation through the market that gives an immediate cash-flow to the TTO and the inventors. We also consider the number of university Spin-offs created as an output. Those firms need time to get positive profits and sometimes these returns do not go to the TTO and remain to the academic entrepreneurs and/or investors (usually, equity holders as venture capitalists or debt-holders as Banks). We define two different inputs. In this sense, we have Inv.disclosure that is the inventions received to the TTO that has potential commercialisation to the market. We also have the Size of the TTO, which are the number of employees in each office. Finally we define 4 environmental variables consistent with the Spanish model. In this sense, we have created four dummy variables. Technical measures if the university is based on technological studies (16%), Public determines the property of the university being either public or private (84%), we also differentiate between new and old TTOs. The

For more detail on the survey or the institutions see Ortin et al. (2007). We check the webpage of the following universities: U. Alcala de Henares, U. Politecnica de Madrid, U. de las Islas Baleares, U. de Salamanca, U. de Sevilla, U. de Valencia y U. de Zaragoza. 18 In Spain there are 61 universities. So we have information of 82% of the population. Moreover, we have information of the universities that traditionally has been more active in innovation and commercialisation, remaining out of our sample those universities with minor impact on innovation. The universities are listed in table 5. 19 As we have some zeros we might sum 1 to all the inputs and outputs.
17

16

18

new (52%) ones are those created after the National Plan (1988). We also define those universities that are near to industrial areas 20(44%).

Table 2 shows the mean of all those variables for the period 2003-2005. We observe that Inv.Disclosure has dramatically increased between 2004 and 2005. Probably this fact explains also the increment of licenses and patents21. We see that the size of the TTOs remaining constant in the range of 13-14 employees. The number of Spin-off per year is around 65 in 2004 and 100 in 200322.

Insert Table 2 -

6. Methodology and Results

6.1 The treatment of Efficiency

In the previous section, we identified a set of potential determinants of the process of university to industry technology transfer; which includes internal inputs, external outputs and environmental/institutional factors.

The microeconomic literature defines efficiency of a production unit as the comparison between observed and optimal values of its output and inputs. The technical efficiency is defined as the ability to obtain the maximum potential output obtainable from the given inputs or the ratio of minimum potential to observe inputs required to produce the given output.

In the economic theory two approaches are recognized to construct frontiers: DEA and SFE. In this work is proposed an application of models of the distance function proposed by Shephard (1953) and Coelli and Perelman (1996) to analyze technical efficiency. The notion of distance to the frontier proposed by Shephard (1953) can be used to calculate the efficiency of a set of units of production in a scene of multiple outputs. DEA first developed by Charnes et al. (1978) is a non-parametric estimation
We consider those universities near Barcelona, Madrid, Sevilla, Bilbao and Valencia as universities near an industrial centre. Notice the patents are on average 75% of the sum of patents and licenses. 22 For more detail in the evolution of Spanish Spin-offs see Ortin et al. (2007). Our data is consistent with their results. They estimate a creation of 90 university Spin-offs per year.
21 20

19

technique that has been used extensively to compute relative productivity in services industries. SFE method first developed by Aigner, et al., (1977) and Meussen and Van den Broeck (1977), are extensions of the tradition regression model, based in the microeconomic premise that the production function represent an ideal: the maximum output that can be obtained with a set of inputs. This interpretation as pointed by Green (1993 (b)) recalls naturally under an econometric analysis, in which the inefficiency is identified with the errors of the regression model.

6.2 Multi-output approach

Thursby and Kemp, (2002) use DEA to assess the relative efficiency of TTOs using a multi-output approach. Multi-output approach is used when is assumed that producer use multiple inputs to produce multiple outputs. DEA is a mathematical programming approach that does not require the specification of a functional form for the production function; but DEA doesnt allow the study of the relations of causality between variables of resource and production. SFE, introduces this last approach but introduces the problem that it is only design to incorporate only one endogenous variable, that represents the output obtained by the productive system and is explained by a set of production factors.

One possible solution to the problem is to add the outputs in a single one dependent variable by the calculation of an indicator that gathers the set of outputs by their prices (Shadow Prices) or by a set of assigned weights subjectively. In the public administration arenas, that is the case of the TTOs, is not advisable to use shadow prices because the sell of the services is not observed so its hard to get the shadow prices to obtain a structure to weight.
t t Lets assume that x t = ( x1t ,..., x K , ) R K + and y t = ( y1t ,..., y M , ) represent the input and

output vectors at time t = 1,..., T

Pt (xt ) = yt

is

obtainable

from

xt

20

Shephards distance function avoids having to establish a priori shadow prices. The output Distance function is defined by Shephard, (1970) as: D o ( x , y ) = min{ : ( y / ) P ( x )}

(1)

The parametric approach of the distance function parts from the theory of the homogeneous functions to introduce the assumption of multiple outputs obtained by multiple inputs. The method was introduced by Aigner and Chu, (1968) for the assumption of one single output and multiple inputs and a Cobb-Douglas function. Here is used that approximation to adapt it to the assumption of a translogaritmic function, that is based in a Cobb-Douglas function, but more flexible than this because its partial derivatives are not constant. The expression proposed of the distance translog function for the assumption of M output and K inputs is the following:

ln D0i = 0 + mn ln y mi +
m =1

K 1 M M 1 K K ln y ln y + ln x + mn mi ni ki ln ki ln xli k ki 2 n =1 m =1 2 k =1 l =1 k =1

M 1 km ln x ki ln y mi , 2 K =1 m =1

i = 1,2,..., N

( 2)

Where Ymi is the production of output m and X ki the quantity of input k for the productive unit i. , , are the parameters to estimate and ln D0i is the term of

inefficiency of the evaluated unit.

Additionally two constraints of homogeneity are required. Homogeneity of degree +1 in outputs and homogeneity of degree +1 in inputs:

n =1 M

mn

= 0, = 0,

m = 1,2,..., M k = 1,2,...K

n =1

km

Homogeneity of degree +1 in outputs is imposed in order to obtain an output oriented


radial distance function. Homogeneity of degree +1 in inputs implies constant returns to scale technology, an assumption necessary to accurately measure productivity

change.
21

The third constraint is of symmetry of the parameters:

mn = nm

m, n = 1,2,...M . and

kl = lk

k , l = 1,2,..., k .

A case of a homogeneous function of degree +1, where is accomplished:


D0 ( x , g * y ) = g * Do ( x , y ) for a g > 0,

If we select arbitrarily one of the M outputs and we consider g = 1 / y M , then:


D0 ( x , y / y M ) = D0 ( x , y ) / y M

And the translogaritmic function would be transformed into:


M 1 m =1 K 1 M 1 M 1 mn ln y *mi ln y ni + k ln x ki + 2 n =1 m =1 k =1

ln( Doi / y Mi ) = 0 + mn ln y *mi +


K

K 1 1 K M ln x ln xli + ki ki km ln xki ln y *mi , i = 1,2,..., N 2 k =1 l =1 2 k =1 m =1

(3)

Where y* = y m / y Mi , this means, the ratio between each one of the outputs and the output selected as a reference to transform g.

The translog can be expressed as follows: ln( Do / y mi ) = f ( xi , y i / y mi , , , ) i = 1,2,..., N .

And this is equal to: ln( Do ) ln( y mi ) = f ( xi , y i / y mi , , , ) Or ln( y mi ) = f ( xi , y i / y mi , , , ) ln( D0 ), where ln( D0 ) = U i

22

This is equivalent to identify the term of error with the logarithm of the distance function. The stochastic approximation in this case adapts the translog form to the assumption that the decomposition of the error term of the model of two stochastic terms: Vit , which is assigned a normal distribution N (0, ) , with mean equal 0 and constant standard deviation, that represents the deviations of the values of production with respect to the frontier by factors affected by uncertainty; not controlled by the participants in the productive process. A second component: ln( D0 ) = U it , that represents the deviations of the observations in the sample with respect to the efficient frontier, because of the inefficiency of the economic agents represented by them. Coelli and Perelman, (1996) considered this second component as the product of two terms: a term that is a deterministic function dependent of time23. This function represents the change experimented with the pass of time of the economic agents represented by the sample used. The other term is a random variable that has been assigned a normal truncated distribution in the value24 0. Beside is allowed that the mean of this second component is zero and that the standard deviation to be constant, but different from the term Vit .

It should be noticed that the value of D0 is not directly observable because it forms part of the composed error term Eit = Vit + U it . The estimation of that value is made by the expected value of the errors due to inefficiencies conditioned to the composed error:
Doi = E [exp(U it ) / Eit ]

That is the expected value of the degree of inefficiency of the corresponding observation, obtained by the comparison of the value of production of this with the value of efficient production, for its levels of available productive resources.

For the translog function we use the program FRONTIER 4.1 (Coelli, 1996).

23 It can be exponential, linear or quadratic depending of witch has been the temporal evolution of the degree of inefficiency of the observations. 24 With this the level of efficiency is not negative.

23

Our equation (4) as indicated before, to construct the distance function is precisely to choose one of the outputs to normalize the function, and the expression of the adjusted function is:
LnLicences = + 1Y1+ 1 X 1 + 2 X 2 + 111 / 2(Y1)2 + 111 / 2( X 1 ) 2 + 22 1 / 2( X 2 ) 2 + 12 X 1 X 2 + 11 X 1Y1+ 21 X 2Y1+ Y1= ln(spinoff / licences) X 1 = ln(inventiondisclosure) X 2 = ln(size)

(4)

6.3 Single output approach

In order to asses relative productivity in the process of technology transfer and using a single output approach, following the methodology of Siegel, et al., (2003) we use SFE. SFE creates a production frontier (Aigner et al., 1977, & Meussen and Van den Broeck, (1977)) with a stochastic error term that is composed by: a conventional random error and term that represents relative inefficiency (deviations from the frontier).

Following Aigner et al. a production function for a given university, say the ith, its estimated:

y i = f ( x i ; ) yi = X i

(5)

Here i denotes the ith university, y i is the maximum output obtainable from xi , a vector of (non-stochastic) inputs and is an unknown parameter. In order to characterize differences in output among universities with identical input vectors or to explain how a given universitys output lies below the frontier, f ( xi ; ) a disturbance term is assumed.

In an attempt to give them a statistical basis, Schmidt (1976) explicitly added a onesided disturbance which yields the model,

yi = f ( xi ; ) + i
i = Vi + U i,
24

i = 1,......, N
i = 1 ,......, N

Where i 0 .

i is an error term with two components. The error component vi represents the
symmetric disturbance: Vi are assumed to be independently and identically distributed as N (0, v2 ). The error component U i is assumed to be distributed independently of vi ,
and to satisfy u i 0. The non-positive disturbance u i reflects the fact that each university output must lie on or below its frontier.

To estimate the technical efficiency of a producer, distributional assumptions are required: The Normal-Exponential Model, the Normal Truncated Normal Model, and the Normal-Gamma Model which are the ones that can be considered. In this model we would use The Normal-Half Normal Model, considering the stochastic production frontier model we make the following distributional assumptions:

(i ) vi iid (ii ) u i iid

N (0, v2 ) N + (0, u2 ), that is as a nonnegative half normal

(iii ) vi and u i are distributed independently of each other , and of the regressors The inefficiency term U i is assumed to have a half normal distribution. The log likelihood function for a sample of ith universities is: 1 ln L = cons tan t I ln + ln i 2 2 i

(6)

Subsequent with some SFE models25, within current time, have been created to allow that the technical inefficiency term can be expressed as a function of a vector of environmental and organizational variables. This is consistent with our assumption that relative inefficiency is related to environmental/institutional factors. So following the studies of Reifschneider and Stevenson (1991) and Siegel et al. (2003), we presume that26 the inefficiency disturbance is composed of two factors, a factor reflecting systematic influences and a random factor: U i = g ( Z i i ) + wi
25 26

(7 )
2 u

For more details see Reifschneider and Stevenson (1991). U i (universities on or below the frontier) are independently distributed as truncations at zero of the N ( m i ,

25

Where Z is a vector of firm specific inefficiency explanatory variables and is a parameter vector. wi is the unexplained component of inefficiency error and has the same assumed normal distribution.

Using the program FRONTIER 4.1 (Coelli, 1996), we obtain maximum likelihood estimates27 of the parameter vectors and from the estimation of the production function and inefficiency term equations.

Ln ( License i ) = 0 + 1 ln( Inv.disclosure i ) + 2 ln( Size ) + Vi U i

(8)

Our equation (8) is based on the model28of Siegel et al. (2003) using Licenses as a proxy of the process of technology transfer output and relating to two inputs: Invention

Disclosure and Size; assuming a three-factor log-linear Cobb-Douglas production


function. And the technical inefficiency (U i ) term expressed as:

U i = 0 + k ENV / INST + i
k

Where ENV/INST is a vector of environmental and institutional factors, and is a disturbance term. Thus, our equation (8) is:

U i = 0 + 1TECH i + 2 PUBLICi + 3 NATIONALi + 4 CLUSTERi + i

(9)

Consistently with our interview in depth and according to Chukumba and Jensen (2005) licenses and patents are important outputs for universities. In this sense, these outputs generate immediate cash-flows, and universities do not have to pay the opportunity cost of renouncing to academics. Moreover, Chukumba and Jensen suggest that TTOs try to commercialise the projects through established firms and consider Spin-offs as a second
27 28

See Battese and Coelli (1995). Siegel et al. developed their equation (page 32) based on the knowledge production function framework developed by Griliches (1979).

26

option. Consequently in this section we analyze the efficiency of TTOs considering on licenses as an output (Siegel, Waldman and Link, 2003). Besides, we also consider spinoff as a single-output to make the analysis more robust (See equation (10)).

Ln ( Spin off i ) = 0 + 1 ln( Inv.disclosure i ) + 2 ln( Size ) + Vi U i


6.4 Results and Comments

(10)

Table 3 contains two sets of parameters estimates of the Multi-output distance function outlined in the previous section (equation (4)) for the dependent variable licences (licences + patents). Models29 1 and 2, (with and without environmental factors respectively), are presented in the first two columns. Across all variants, the estimated elasticity of Y2/Y1 (Y1) with respect to invention disclosure is positive and significant in model 1. This means that if more new innovations are disclosed then more licences agreements are commercialized. The estimated elasticity of Y1 with respect to size is positive and significant in model 1 and 2. It appears that hiring additional staff for the TTO increments the commercialization of licences agreements. Consequently, the extra information that we can extract from this analysis come from the relation of the outputs. We see that there is a quadratic effect between the ratio Y2/Y1 (Y1) and the amount of licenses (Y1). In this sense from Model 1 there is an optimal ratio that maximises the level of licenses commercialised. Operating30 this optimal ratio is Y2/Y1 = 0,7639.

Insert Table 3 -

Removing logarithms we get that in the optimal situation Spin-offs equal to Licenses0,7639. Finally, from the positive sign and significance of the parameters 2 and

11 of the Models 1 and 2 we can accept for Hypothesis 1 and 2.


In the model 3 (licences) and 4 (spin-off) of the table 3 we show the results for panel data analysis. We can see that invention disclosures affect positively and highly significant the number of licenses and the number of spin-off created. In this sense,
29 30

Notice that variables x1, x2 and y2 are divided by y1. For homogeneity reasons this fact is not mentioned in the Table 3. We make a first order approach to get such result (Y2/Y1 = Y1 = 2,24/2,93 = 0,7639)

27

from the coefficient of Model 3 and 4, if we double the number of invention disclosures the licenses would increase in 82%, and the spin-off would increase in 15%. The relation between size of the TTOs is positive and highly significant for model 3 this means that if we double the size of the TTO licences would increase in a 27%.

It is important to notice, that for the Model 1, we have significant results for the environmental variables. So we can say that universities that have a technical profile and public universities have higher licence activity. But the ones that are near an industrial cluster reduce the licence activity. This last result might come because of the high competition, in this sense, universities operating in small markets or cluster work better as they have less competence. Besides, we do not find experience effect as
3

is

not significant. Notice that the results of Model 3 are consistent with the results outlined.

The mean technical efficiency is consistent with Siegel et al. (2003). In particular, they found that the mean of technical efficiency for US are closed to 0,75 very similar to the ones found for model 1 (0,72) model 2 (0,68) and model 3 (0,64).

A set of aspects that are interesting and that can be studied in an analysis of this type of models, are the ones referring to the structure of the term of error, dispersion of efficiencies and the distributions of probabilities of the density function component of the error term representing the degree of inefficiency. In the models 1, 2 and 4 results highly significant the parameter bounded to sigma squared, that gathers the total variance of the error term. Also the parameter associated to gamma, are significant in the model 1 and 3, which represents the proportion of variance of the stochastic term of inefficiency with respect to the total variance. Besides, we check for specificities of technology based31 universities (UPC; UPV; UPM). In order to see if technological based are more efficient a One-way ANOVA was run. We use the technical efficiency from model 1, 3 and 4. We cannot reject the null hypothesis that the mean are equal (see table 4) in model 1 and 3 at the traditional levels of significance. Even though for model 4 (spin-off) there is a significant difference (this

31

In Spain they are called Polytechnics (Politcnica in Spanish).

28

means that for the spin-off there a difference between the TTOs) we consider that this fact does not justify a separate analysis. Therefore, we can say that technology based universities are not more efficient than their counterparts.

- Insert Table 4 -

Besides, the efficiency analysis at university level has also special interest; in particular, the study of the efficiency of the technological based universities. To do so we use the technical efficiency for each one of the university considering the three years. We have the source of technical efficiency coming from Panel Data analysis: SFE with multioutput (from Model 1) and SFE with single output (from Model 3). The results are presented in Table 5.

- Insert Table 5 -

We can observe that the polytechnic universities are ranked in both models below the mean, and this is consistent with the results we obtained from the ANOVA that we explained before. We can extract from Table 5 that the universities that maintain the first positions constant for the three years are University of Navarra or University of Zaragoza; and the universities that maintain the worst position are the University of La Corua.

6.4 What affects efficiency?

It is of special interest to explain which variables determine efficiency. In this sense, our Hypothesis 3 states that there is a positive relation between efficiency and the amount of inventions commercialized (Vendrell and Ortin, 2006). In a first attempt to see this relation we use a one way ANOVA. First we divided the sample of licences in three groups32. From table 6 we can observe that the mean efficiency is significantly different between groups, being higher for the universities that have a greater number of licences. From this result we can accept Hypothesis 3.

32

Group 0= between 0 and 1 licence, Group 1= between 2 and 9 licences, Group 2= 10 or more licences.

29

Insert Table 6 -

In order to make the analysis more robust we propose a panel data with fixed effects (Green, 1983; pp. 560-566). Our dependent variables are the scores presented in Table 5. Consequently, we run two different models taking into account the mean efficiency of the models 1 and 3. The results are shown in the Models 5 and 6 of the Table 7.

- Insert Table 7

The results indicate that an increment of one license or patent entails a growth of 2% of the technical efficiency (it ranges from 1,5% to 2,2%). Similarly creating a new spin-off increase the technical efficiency around 1%. Ceteris Paribus, the expected effect of increasing an input is a reduction of the technical efficiency. This fact explains the sign of invention disclosure. A new invention disclosure produces a reduction of 2% in the technical efficiency. Its important to recall that the effect of TTO size is diffuse because it has a positive and not signficant impact on efficiency. Consequently TTO size does not have the effect predicted by the theory on technical efficiency.

7. Conclusions, limitations and further research.

The efficiency of the university TTOs is an important discussion in the academic literature (Siegel et al., 2003; Thursby and Kemp, 2002). In this sense, this paper fills two existent gaps of the previous literature. First, set up evidence on Spanish TTOs. Second, introduce an important methodological tool that has not been used in the previous works. This important methodological inside of the paper is the use of SFE with a multi-output approach.

From our analysis we shed light into several issues. The mean technical efficiency for the Spanish TTOs ranges from 0,72 (SFE with multi output) to 0,64 (SFE with single output). These results are consistent with the evidence found by Siegel et al. (2003) for the case of US (around 0,75). Invention disclosure and TTO size increases the amount of commercialisation done and hence the efficiency of the TTO. From this result we can state an important advice for policy makers. TTO might increase their size and amount of invention disclosure. For this second variable it is important to look for good 30

incentives and information. In technical efficiency terms they should try to avoid inventions without potential commercialisation. This is probably the case of technology based universities (UPC, UPM and UPV).

We also look for the impact on environmental factors. Even the evidence is weak, the results indicate that Public and technical universities are more efficient than their counterparts. Additionally, we could find neither experience nor industrial cluster effects.

The work has two important limitations related to the data base. First, our sample is small what difficult the introduction of several independent variables required by SFE. Second, we do not have information of a relevant output that would enrich our analysis. In this sense, the introduction of research contracts could modify some of the results. As a further research we recommend the extension of the sample with the TTOs of some South-European countries similar to Spain such as Portugal, France or Italy. Moreover, apart from the introduction of the amount of research contracts we also think that it is important controlling for the quality of research as an environmental factor. A possible proxy would be a relative amount of the papers published in top scientific journals.

31

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Figure 1: Linear model of the process of technology transfer from universities to firms.

Invention Disclosure

Evaluation of the invention for patenting TTO Patent Group of Investigation

Commercializati on of the technology to the firm

FIRM

Negotiation of a license

License to the firm (existent or start-up


Source: Siegel et al. 2003; Friedman and Silberman 2003.

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Graphic 1. Evolution of the volume of R&D contracts signed* (in millions of Euros)

*Contracts of R&D and Consultancy (art. 83), services and other activities. Data of 51 of the 60 universities. Source: REDOTRI Universidades

Graphic 2. Evolution of the activity of Intellectual Property

Data of 52 of the 60 universities. Source: REDOTRI Universidades

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Graphic 3. Evolution of the number of license agreements

Data of 48 of the 60 universities. Source: REDOTRI Universidades

Graphic 4. Evolution of the income generated by license agreements

Data of 41 of the 60 universities. Source: REDOTRI Universidades

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Graphic 5. Evolution of the Spin-off created

Data of 40 of the 60 universities. Source: REDOTRI Universidades

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Table 1 Utility Patents Issued to U.S Universities and Colleges, 1969-1997 year issue

Year 1969 1974 1979

Number of U.S patents 188 249 264 Bayh-Dole Act 1980 1984 551 1989 1780 1997 2436
Source: Extracted from Mowery et al. 2001

Table 2: Descriptive Statistics

Variables Inv. Disclosure TTO Size Licenses Spin-off Technical Public Posterior National Plan Near a Industrial center

2003 Inputs 10,8 12,9

2004 10,1 13,4

2005 32,6 14 30,2 1,4

Outputs 4,4 9,5 2 1,3 Environmental factors 16% 84% 52% 44%

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Table 3: Results SFE with Panel Data

Inputs: Invention disclosure (x1), size (x2) Outputs: Licenses (y1), Spin-off (y2) Environmental factors: Technical (z1), Public, Posterior National Plan (z3), Near an Industrial Centre (z4) Model 1 Model 2 Model 3 Model 4 Variables and Parameters Licenses & Licenses & Licenses Spin-off Spin-off Spin-off (lny1) (lny2) (lny1&lny2) (lny1&lny2) Intercept -0,736 -0,596 -0,112 -0,141
0

Inputs

ln x1 ln x2 (ln x1)2 (ln x2)2 (ln x1)(ln x2)

0,215* 0,785* 0,361*** -0,218 -0,069 2,240*** -2,932*** -0,165 0,132 -9,692* 1,762** 6,620** 0,195 -1,182** 0,192** 0,915*** -123,51 0,72

0,036 0,804* 0,374*** -0,232 -0,048 2,523*** -0,345*** 0,064 -0,014

0,820*** 0,271***

0,153*** 0,188

2 11 22 12 1 11 12 22
0

Outputs

ln y2 (ln y2)2

InputsOutputs Environmental

(ln x1)(ln y2) (ln x2)(ln y2) z0 z1 z2 z3 z4

-21,014* 3,692* 7,720** 2,443* -1,920** 0,512*** 0,561** -128,86 0,68 0,174* 0,403*** -165,14 0,64

0,014 0,258 -0,215 0,275 -0,271 0,474*** 0,698 -149,68 0,94

1 2
3

Other ML Parameter LogLikelihood Mean Efficiency

Level of Statistical significance: *** 1%, ** 5%, * 10%

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Table 4. Results of technology based universities vs. non-technology based universities.

From Model 1 Mean Efficiency Observations Technology Based university Other Total 0,648 0,721 0,717 9

Significance Prob>F 0,1782

141 150

From Model 3 Mean Efficiency Observations Technology Based university Other Total 0,623 0,646 0,644 9

Significance Prob>F 0,7218

141 150

From Model 4 Mean Efficiency Observations Technology Based university Other Total 0,917 0,834 0,839 9

Significance Prob>F 0,0018

141 150

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Table 5. Technical Efficiency in SFE

Technical Efficiency SFE Multi Output (from Model 1) Year Year Yeat Rank 2003 2004 2005 Mean

U. de Alcala de Henares U. de Alicante U. de Almera U. Autnoma de U. Autnoma de Madrid U. de Barcelona U. de Burgos U. de Cdiz U. de Cantabria U. Carlos III de Madrid U. de Castilla-La U. Complutense de U. de Crdoba U. de da Corua U. de Deusto U. Europea de Madrid U. de Extremadura U. de Girona U. de Granada U. de Huelva U. de les Illes Balears U. de Jan U. Jaume I U. La Rioja U. de Lleida U. de Mlaga U. Miguel Hernndez de U. de Murcia U. de Navarra U. de Oviedo U. Pablo de Olavide U. del Pas Vasco U. de Las Palmas de GC U. Politcnica de U. Politcnica de Madrid U. Politcnica de U. Pompeu Fabra U. Pontificia Comillas U. Pontificia de U. Pblica de Navarra U. Ramon Llull U. Rey Juan Carlos U. Rovira i Virgili U. de Salamanca U. de Santiago de U. de Sevilla U. de Valncia U. de Valladolid U. de Vigo U. de Zaragoza

0,832 0,821 0,703 0,756 0,722 0,326 0,742 0,697 0,606 0,581 0,876 0,690 0,724 0,480 0,826 0,911 0,882 0,715 0,251 0,480 0,681 0,552 0,682 0,746 0,757 0,669 0,833 0,874 0,901 0,742 0,814 0,323 0,504 0,660 0,199 0,802 0,698 0,836 0,863 0,775 0,900 0,684 0,402 0,118 0,630 0,674 0,885 0,345 0,829 0,897

0,769 0,816 0,715 0,754 0,783 0,877 0,748 0,787 0,725 0,481 0,622 0,776 0,780 0,689 0,817 0,877 0,692 0,561 0,745 0,780 0,563 0,740 0,723 0,767 0,757 0,737 0,482 0,871 0,883 0,647 0,688 0,695 0,713 0,788 0,756 0,763 0,693 0,892 0,863 0,814 0,796 0,812 0,640 0,816 0,859 0,792 0,793 0,812 0,929 0,914

0,747 0,770 0,768 0,816 0,708 0,819 0,716 0,252 0,802 0,801 0,451 0,698 0,779 0,353 0,817 0,842 0,815 0,803 0,681 0,715 0,805 0,682 0,804 0,732 0,740 0,744 0,762 0,805 0,870 0,346 0,755 0,758 0,508 0,632 0,657 0,579 0,620 0,841 0,863 0,687 0,889 0,753 0,237 0,801 0,814 0,831 0,780 0,746 0,861 0,827

13 11 26 14 23 35 25 44 30 41 39 27 17 49 9 3 12 32 47 38 34 37 24 22 20 28 33 8 1 43 19 42 46 31 48 29 36 7 5 18 6 21 50 45 15 16 10 40 4 2

Technical Efficiency SFE Multi Output (from Model 3) Year Year Yeat Rank 2003 2004 2005 Mean 0,559 0,724 0,708 28 0,713 0,744 0,772 10 0,543 0,679 0,719 29 0,714 0,674 0,765 13 0,663 0,736 0,655 21 0,299 0,841 0,718 33 0,577 0,699 0,732 26 0,662 0,723 0,247 44 0,365 0,583 0,820 38 0,240 0,505 0,658 48 0,750 0,799 0,489 23 0,690 0,727 0,649 20 0,472 0,740 0,786 27 0,250 0,665 0,167 49 0,719 0,707 0,707 15 0,798 0,806 0,637 9 0,774 0,692 0,777 8 0,413 0,513 0,732 42 0,130 0,707 0,809 43 0,249 0,740 0,677 40 0,661 0,708 0,779 14 0,308 0,694 0,685 39 0,504 0,832 0,741 19 0,693 0,710 0,707 16 0,704 0,704 0,694 17 0,446 0,693 0,795 30 0,646 0,655 0,718 25 0,770 0,867 0,759 1 0,734 0,791 0,795 2 0,716 0,705 0,355 35 0,613 0,740 0,697 22 0,161 0,647 0,787 45 0,264 0,711 0,601 46 0,567 0,681 0,553 34 0,084 0,684 0,776 47 0,734 0,757 0,778 6 0,646 0,638 0,616 31 0,626 0,812 0,730 12 0,762 0,762 0,762 4 0,723 0,738 0,627 18 0,308 0,704 0,758 37 0,419 0,762 0,696 32 0,154 0,583 0,184 50 0,083 0,790 0,790 41 0,503 0,731 0,791 24 0,659 0,811 0,781 7 0,755 0,741 0,788 5 0,181 0,789 0,801 36 0,545 0,915 0,757 11 0,640 0,913 0,751 3

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Tables 6. Relation between mean efficiency and number of licenses.

From MODEL 1 Licenses Mean Observations Efficiency 0 1 2 Total 0,632 0,733 0,788 0,717 51 49 50 150

Sig. Prob>F

0,0000

From MODEL 3 Licenses Mean Observations Efficiency 0 1 2 Total 0,531 0,658 0,747 0,632 51 49 50 150

Sig. Prob>F

0,0000

From MODEL 4 Licenses Mean Observations Efficiency 0 1 2 Total 0,810 0,836 0,872 0,839 51 49 50 150

Sig. Prob>F

0,0003

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Table 7: Panel Data with Fixed effects

Model 5 (From model 1) Multi Output

Model 6 (From model 3) Single Output (Licenses)

Licenses Spinoff Size Invention Disclosure Intercept Observations Within Between Overall

0,015*** 0,012*** 0,011 -0,015*** 0,583** 150 0,3885 0,0064 0,0779


Level of Statistical significance: *** 1%, ** 5%, * 10%

0,022*** 0,0096** 0,0103 -0,021*** 0,528* 150 0,5605 0,015 0,2120

46