A dynamic capabilities perspective on pro-market reforms and university technology transfer in a transition economy
Introduction
University technology transfer (UTT), involving the transfer of scientific breakthroughs and technological innovations to the marketplace, is considered by growing numbers of scholars as a fundamental mechanism for enhancing economic growth and regional development (González-Pernía et al., 2013; Mendoza and Sanchez, 2018). UTT occurs as a highly contextual phenomenon (Švarc and Dabić, 2019) and depends on contextual factors related to external institutional characteristics, socioeconomic conditions, and university-specific traits (Sandström et al., 2018). Since transition economies, such as China, are experiencing pro-market reforms from socialist economies to market economies, while non-transition economies are not, the institutional and socioeconomic contexts in which UTT is embedded differ between the two types of economies. Thus, UTT in transition economies will not develop as in non-transition economies (Sandström et al., 2018; Švarc and Dabić, 2019). In practical terms, non-transition economies often implement specific innovation and entrepreneurship policies that are designed to enhance UTT, such as the Bayh-Dole Act and the Small Business Innovation Research (SBIR) program in the US, the German Excellence Initiative, and the Professor Privilege in Europe (Cunningham et al., 2019; Korosteleva and Belitski, 2017; Martínez and Sterzi; 2020; Siegel and Wessner, 2012). However, in addition to emulating these UTT-specific policies, transition economies also adopt a series of pro-market reforms policies to stimulate UTT with the goal of creating a UTT-friendly institutional environment, policies such as the Reform and Opening-up in China,1 and European Structural and Investment Funds (ESIF) in Croatia2 (Hong et al., 2016; Švarc and Dabić, 2019). Thus, unlike in non-transition economies, in transition economies, UTT is supposed to be influenced profoundly by the implementation of pro-market reforms.
In transition economies, compared with privatization of state enterprises and the development of new small and medium-sized enterprises (SMEs), UTT may be an more effective form of innovation and entrepreneurship activity (Švarc, 2014; Švarc and Dabić, 2019; Kshetri, 2009); UTT not only generates more funding for university research and education missions but also creates wealth for societies (Sandström et al., 2018; Yuan et al., 2018). As a result, in transition economies, both university administrators and government policy makers have a particular interest in UTT. Considering that transition economies are enacting pro-market reforms, an investigation into the relationship between pro-market reforms and UTT will help university administrators evaluate and adjust their UTT strategies to respond and adapt to reforms and help policy makers design and implement effective policies for pro-market reforms.
Although scholars show a strong academic interest in pro-market reforms and UTT, unfortunately, the relationship between these two concepts has received limited attention. In the pro-market reforms literature, scholars argue that pro-market reforms are an essential institutional change in transition economies and exhibit various scopes (degrees) and speeds (rates) within a country and across countries (Shi et al., 2017). They also find mixed effects of pro-market reforms on firm performance and innovation and entrepreneurship activities. For example, some scholars confirm a positive or U-shaped relationship between the scope of reforms and both firm profitability and technology transfer (Chari and Banalieva, 2015; Cuervo-Cazurra and Dau, 2009; Yi et al., 2015). Other scholars find a negative or inverted U-shaped relationship between the speed of reforms and both firm performance and innovation activities (Banalieva et al., 2015; Lin et al., 2018; Putzhammer et al., 2020). In addition, in the UTT literature, scholars find that university-specific traits, external institutional characteristics and socioeconomic conditions all influence UTT (Sandström et al., 2018). By combining these two streams of the literature, we posit that pro-market reforms are a salient institutional characteristic in transition economies and should exert an impact on UTT, for which some scholars have been calling (Švarc and Dabić, 2019; Yuan et al., 2018). However, to date, scarce research attention has been paid to the impact of pro-market reforms on UTT.
Leveraging the dynamic capabilities perspective (Leih and Teece, 2016; Teece, 2007, 2016), we develop a framework to theorize how changes in pro-market reforms (which are reflected in the scope and speed of reforms) in a transition economy bring about opportunities and challenges for the intellectual property (IP) outputs of UTT, including patenting, licensing, and licensing revenue. Additionally, researchers have suggested that because university-specific traits, such as staff size and university-industry (UI) linkages, determine the university's dynamic capabilities, different universities will respond differently to a changing environment (Leih and Teece, 2016). Accordingly, we further investigate whether or not the relationship between the scope/speed of pro-market reforms and UTT differs across universities depending on their dynamic capabilities. We test our hypothesized relationships with a sample of 1061 universities in 31 Chinese provinces from 2005 to 2013.
Our study contributes to theory and empirical evidence and provides important implications for university administrators and policy makers. First, theoretically, we integrate the dynamic capabilities perspective to advance the research on the impact of pro-market reforms on UTT. By theorizing about the opportunities/challenges in terms of UTT brought about by the scope/speed of pro-market reforms, we broaden our knowledge of pro-market reforms and extend the application of dynamic capabilities in the context of universities. Second, empirically, we provide the first set of empirical evidence on the relationship between pro-market reforms and UTT and on how this relationship differs in different sub-national regions in a transition economy. Finally, practically, our research further confirms that both university administrators and policy makers need to be aware that the opportunities and challenges of pro-market reforms coexist for UTT and should prepare well to adjust their UTT strategy and reforms policy, respectively.
Section snippets
Research background and literature review
In this section, to introduce our research question, we provide research ground and literature review on pro-market reforms and UTT, respectively. We first briefly review the pro-market reforms literature and explain that the scope and speed of pro-market reforms are crucial in understanding the effects of reforms on UTT in a transition economy. Then, we review the UTT literature and specify that it is necessary to investigate the effect of pro-market reforms on UTT in a transition economy.
A dynamic capabilities perspective of UTT
Dynamic capabilities refer to “an organization's (or institution's) ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments” (Leih and Teece, 2016, p. 187). Although the dynamic capabilities literature focuses on for-profit organizations, scholars have argued that a dynamic capabilities perspective can be extended to not-for-profit organizations (e.g., universities and public institutions) to probe more in-depth into the
Data and sample
We test these hypotheses on the longitudinal data of universities present in China from 2005 to 2013. University samples are obtained from the Science and Technology Statistical Data of Higher Education Institutions (STSDHEI) between 2005 and 2013 (inclusive). The STSDHEI is a statistical yearbook provided by the Ministry of Education of China. We first identify 1170 universities and 8144 university-year observations. Considering the panel data estimation requirements, we exclude universities
Results
Table 1 presents the descriptive statistics and correlation matrix. To check for possible multicollinearity, we also examine the variance inflation factors (VIFs). In our models, all VIF values are well below the threshold value of 10, and the mean VIF value is 1.40. This result suggests that multicollinearity is not significant.
Table 2 reports the results from the multilevel negative binomial regression analysis. Models 1–3 are the base models and include all control variables and moderators.
Robustness tests
We conduct further analyses to check the robustness of our findings.
First, to enhance the robustness of the independent variable, we use Fan et al.’s (2011) index of marketization for each sub-national region in the period 2008–2013, instead of Banalieva et al.’s (2015) index, which we adopted previously, to measure the scope and speed of pro-market reforms. The effects of a greater scope of pro-market reforms on the three aspects of UTT remain positive and significant, and those of a greater
Discussion
For both transition and non-transition economies, UTT is considered an effective vehicle for innovation and entrepreneurial activity (Siegel et al., 2007; Švarc, 2014). Extant studies have explored the contextual factors of UTT and maintained that UTT occurs as a highly contextual phenomenon (e.g., Belitski et al., 2019; Cunningham et al., 2019; Fischer et al., 2018; Sternberg, 2014). However, these studies have concentrated on North America and Europe (Sandström et al., 2018), and studies on
Limitations and future research
There are a few limitations to our research that suggest a series of promising future directions. First, despite highlighting the dynamic capabilities in the context of universities, we do not directly measure them. To the best of our knowledge, this is a common limitation in research on dynamic capabilities. Previous reviews of the dynamic capabilities literature have not found direct measures for dynamic capabilities either in the context of firms (Barreto, 2010; Easterby-Smith et al., 2009;
Conclusions
In conclusion, this study investigates the relationship between pro-market reforms and UTT in the case of China and examines the moderating effect of university staff size and UI linkages on this relationship. Leveraging the dynamic capabilities perspective in the context of universities, we develop a conceptual framework to explain how changes in pro-market reforms in terms of the scope and speed dimensions over time influence UTT in a transition economy. A greater scope of sub-national
Funding
This study was jointly funded by Humanities and Social Science Fund of The Education Department of Henan Province (2021-ZZJH-077), National Office for Philosophy and Social Sciences (20CGL017), High-level Talent Fund of Henan University of Technology (32400325), and Philosophy and Social Science Fund of Henan Province (2019CJJ093).
Declaration of competing interest
The authors declare that they have no conflict of interest.
Acknowledgments
The authors would like to thank the editor and the anonymous reviewers for their comments on earlier versions of the paper. We also would like to thank Humanities and Social Science Fund of The Education Department of Henan Province (2021-ZZJH-077), National Office for Philosophy and Social Sciences (20CGL017), High-level Talent Fund of Henan University of Technology (32400325), and Philosophy and Social Science Fund of Henan Province (2019CJJ093) for providing funding for this research.
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