Political climate and academic entrepreneurship: The case of strange bedfellows?

Abstract Universities have fully embraced academic entrepreneurship, transforming their structures, systems, and processes to generate licensing revenues and create new ventures. While prior research has mainly focused on the relationship between public policy and entrepreneurial activities, this study examines a major gap – the performance implications of regional politics on academic entrepreneurship. We use a unique data set of U.S. universities and their regional governments to test how the influence of two elements of a region's political climate – consensus and stability – affects entrepreneurial and commercial performance. Our results suggest that political consensus and stability are positively associated with higher licensing revenues, while political stability is negatively associated with new venture creation. Our results reveal how regional politics influence university commercial outcomes, which suggests that entrepreneurship-enhancing public policy is intimately linked to the regional political process. We discuss the implications for theory and practice, and suggest possible future research directions.