Abstract

What predicts the decision of technology transfer organisations (TTOs) to license inventions to existing firms rather than to facilitate the creation of a new spin-off firms? This is a very topical question in the entrepreneurship literature (Shane 2002; Lowe and Ziedonis, 2006) with practical implications for the TTOs themselves.

We adopt a capability perspective (George, 2005; Zahra et al. 2006) to explore the above question. We pose that licensing to existing firms and spinning-off are “alternative capabilities”; they are both oriented towards the same outcome (commercialise an invention) but following different routes. TTOs face a common situation in which a new way of doing things (an alternative capability) appears at a latter stage to ‘compete’ with a traditional one.

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