Do University Entrepreneurship Programs Promote Entrepreneurship?
Do University Entrepreneurship Programs Promote Entrepreneurship? (with Chuck Eesley)
Recently, many universities have developed programs to promote student entrepreneurship. However, relatively little is known about the impacts of such university initiatives. This paper examines how Stanford University’s entrepreneurship initiatives affected entrepreneurial activity using the Stanford Innovation Survey, a unique survey that asks the entrepreneurship activities of Stanford degree-holders. We examine Stanford University’s two major initiatives that were established in the mid 1990s - the Stanford Center for Entrepreneurial Studies at the Business School and the Stanford Technology Venture Program at the Engineering School. OLS regressions find that program participation is positively related to entrepreneurship activities. However, selection of more entrepreneurial students into program participation hinders causal interpretation. We utilize the fact that the initiatives were implemented at the school level, i.e., only students in the respective schools were primarily affected by each program, to examine the programs’ impacts. Using the introduction of each school’s program as an instrument for program participation, we find that the business school program has a negative to zero impact on entrepreneurship. Participation in the engineering school program has no impact on entrepreneurship. However, the business school initiative decreases the probability that the startup fails and increases firm revenue. Overall, the findings imply that university entrepreneurship programs may not increase entrepreneurship, but help students to better identify their potential as entrepreneurs and improve the quality of entrepreneurship.