Evaluating government intervention in academic entrepreneurship: an identity perspective and evidence from China

Government often seeks the creation of academic spin-offs as a critical mechanism of technology transfer. However, most academic ventures that government backs do not grow as expected. This paper aims to re-examine the effect of government intervention from an identity perspective, claiming that government imposes a higher social vision than private investors do. By empirically investigating the performance of academic spin-offs listed in China between 2008 and 2016, we find that although spin-offs controlled by government exhibit weaker financial performance than those controlled by private investor, they produce more innovative outputs. Extending this identity view to management behaviour, we further find that certain governance mechanisms - financial incentives and ownership concentration - can moderate both the financial and innovative performance of spin-offs under government control, providing policymakers with an important lesson on adjusting strategies when engaging in academic entrepreneurship.