Commercializing Science: Is There a University "Brain Drain" from Academic Entrepreneurship?

When academic researchers participate in commercialization using for-profit firms there is a potentially costly trade-off – their time and effort are diverted away from academic knowledge production. This is a form of brain drain on the not-for-profit research sector that may reduce academic research productivity and adversely impact university performance and long-run economic growth. In this paper, we examine the economic significance of the brain drain phenomenon using scientist-level panel data. Life scientists who start of join firms are compared to a randomly selected control group of their research peers across four indicators of academic research productivity. Combining our statistical results with data on the number of university spin-offs in the U.S. from 1994 to 2004, we find the academic brain drain has a nontrivial impact on knowledge production in the not-for-profit research sector.