Banking relationship and research spin-offs’ life cycle: The Italian experience

Research Spin-Offs (RSOs) are special firms created within universities or research institutes that require significant financial resources to transfer their innovative technologies to the market. This work studies an important driver of RSOs’ success, i.e. the local banking environment in which such firms operate. Empirical results highlight that the local development of the banking sector does not affect RSO performance at the time of incubation, when the main source of funding comes from public contributions. Conversely, there is a significant positive and growing influence of local banking relationships when the RSO enters the market and becomes independent of public resources. The findings suggest that governments and banking institutions should develop new financial instruments to support RSOs, especially during the early stages of their life cycle. RSOs should consider bank debt as a complementary source of funding that allows them to encounter the vital growth opportunities emerging during the incubation phase.