University Spillovers: Does the Kind of Science Matter?

This study examines the impact of university spillovers on the locational choice of firm formation. Based on a unique and hand-collected data set of high-technology start-ups publicly listed in Germany, this paper tests the propositions that geographic proximity to the university is influenced by the kind of science and type of knowledge spillover. The results provide evidence that younger high technology start-ups (less than eight years old) settle near universities with a high academic output and a high number of students in both natural and social science. Thus, spillover of tacit knowledge has an impact on the firms' geographic decision. Older firms, however, only locate closer to technical universities in order to satisfy demand for traditional German industries such as engineering and machinery.