Scandinavian Working Papers in Economics

Working Papers,
Swedish Entrepreneurship Forum

No 2012:20: Does Academic Entrepreneurship Pay?

Pontus Braunerhjelm (), Anders Broström and Thomas Åstebro
Additional contact information
Pontus Braunerhjelm: Swedish Entrepreneurship Forum, Postal: Swedish Entrepreneurship Forum, Örebro University, SE-70182 ÖREBRO, Sweden
Anders Broström: Department of Industrial Economics and Management, CESIS, Royal Institute of Technology
Thomas Åstebro: Department of Strategy, HEC Paris, Postal: Swedish Entrepreneurship Forum, Örebro University, SE-70182 ÖREBRO, Sweden

Abstract: Various policies have been devised to stimulate the creation of spin-offs from universities by academics. But we still do not know whether it is privately beneficial for academics to start new businesses. To address this question we compile total earnings for the universe of 478 individuals aged 60 or less working at Swedish universities who quit to become full-time entrepreneurs between 1999 and 2008. Using tax filings we record all possible earnings including wages, business income, dividends and capital gains. There are very few full-time academic entrepreneurs. Earnings are similar before and after becoming an entrepreneur and dividends and capital gains are inconsequential. But the income risk is more than three times higher in entrepreneurship. Entrepreneurship for academics appears a gradual process and quite episodic. Little explains entrepreneurial earnings except prior wage and forming a sole proprietorship.

Keywords: academic entrepreneurship; earnings; Sweden

JEL-codes: J39; J62; M13; O32

37 pages, November 23, 2012

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