Boon or Boondoggle? Business Incubation as Entrepreneurship Policy

Business incubators, a popular entrepreneurship policy intended to help new businesses avoid the risks of failure and generate economic growth, now serve more than 1,600 communities across the United States. Business incubators help new ventures by providing subsidized office space, shared administrative services, access to capital and financing, networking opportunities, and assistance with legal, technology transfer, and export procedures. Despite the widespread existence of business incubators, little systematic knowledge exists detailing whether incubators help new ventures improve their business performance. This dissertation investigates two questions: 1) Do incubated firms outperform their unincubated peers? And 2) Does the economic performance of incubated firms vary according to design characteristics of incubators and attributes of the entrepreneur? These studies rely on a sample of approximately 950 business incubators, 19,000 incubated businesses, and a matched control group of unincubated businesses. Measures of new venture performance include survival, employment growth, and sales growth. Overall, this dissertation concludes that business incubation lowers the expected lifespan of incubated businesses while increasing their employment and sales growth rates. Additionally, this dissertation finds that certain types of business incubators create better-performing new ventures and that women owned firms benefit more from incubation than men owned firms