Italian university spinoffs vs Italian innovative companies: a comparative analysis of profitability, liquidity and efficiency profile

This paper, as part of the PRIN "University spin-offs: competitiveness, attractiveness and value", intends to increase the knowledge on the performance of university spinoffs, studied until now especially for the dynamics of constitution and development that characterize them. The study attempts primarily to measure the financial performance of Italian university spinoffs and Italian innovative start-ups and SMEs. Furthermore, it aims to determine whether the Italian academic spinoffs's financial condition tends to be different respect to Italian innovative companies. In order to reach these objectives, the financial statement analysis, with financial ratios to ascertain profitability, liquidity and efficiency profile, and the t-test have been used. University spinoffs have higher value of ratios if compared to innovative startups and SMEs. Furthermore, t-test highlights the existence of significant differences in the profitability, liquidity, structure and efficiency profile between two groups of companies. per employee and Working capital per employee is observed among innovative companies and academic spinoffs.


Introduction
In recent year the role of universities has been changing, assuming today as a basilar pillar in the construction of knowledge societies. As a result of the changing in the cultural and social environmental in which universities play a relevan role, have been assuming an increasing emphasis in any discussion about the production, diffusion and conversion of knowledge in economic and social value. Recent studies show that university spin-offs stimulate socio-economic innovation, create significant social impacts and economic benefits for local communities, new jobs and wider research opportunities for university staff (Stefanelli et al., 2020;Peng, 2006). Most of the studies on university spin-offs have been directed at the relationship between resources, performance and the degree of survival, concluding that the synergistic interaction between resources is relevant for growth. Other researchers have investigated the effect that patents have on the birth of spin-offs. Furthermore they show the importance of public incentives, as well as the entrepreneurial training and incubation initiatives provided for university spin-offs. The analysis on performance have highlighted difficulties of investigation linked to the volatility of the results which would make insignificant the traditional financial ratio. In this regard, in the literature the most investigated business variables are profitability, turnover, assets and the variation of number of employees. In other studies the risk profile, the degree of innovation and the number of patents, the presence of venture capitalists were considered. Another topic concerns the quality of human resources, essential for the success and growth of university spin-offs. Researchers with a low academic profile generally create less innovative spin-offs. The most qualified researchers promote spin-offs with greater potential, being able to interact with important scientific networks and with business system of reference. However, if the academic profile of the founders is a guarantee of scientific excellence, it can also represent a critical element if not accompanied by specific entrepreneurial/managerial skills and a predisposition to participate actively in the entrepreneurial project. Researchers often prefer to maintain their commitment in the academic activity rather than in the spin-off considered risky and uncertain; this can compromise the entire business activity. Considering the financial provision, equity raising encounters a limit in the low inclination of academic staff to contribute with their own resources to entrepreneurial initiatives (Zapata-Guerrero, 2020). University spin-offs, on the other hand, can rely on specific public funding; moreover, informal investors are increasingly present in the stock market, such as incubators, business angels (Bessière et al., 2020;), venture capitalists (Cumming and Zambelli, 2017;Cumming and Zambelli, 2013;Zambelli, 2014) and, more recently, equity crowdfunding (Daldrup et al ., 2020) and venture philanthropy (Bessière et al., 2020), naturally interested in investing in companies with high development and growth potential. However, their participation in the risk capital of the spin-offs is still limited, especially in Italy (Stefanelli et al., 2020). Likewise, the collection of debt capital has the limit given by the lack of effective methodologies for rating evaluation not based on exclusively quantitative-financial parameters. The state of the art, therefore, does not show significant contributions on the performance and value of university spin-offs and indicates the absence of knowledge on the risks underlying their financing and on the consequent financial barriers that prevent their growth in terms of competitiveness. Starting from this gap in literature, the study aims to increase the knowledge on the performance of university spinoffs, studied until now for their dynamics of constitution and development, and to identify any differences with respect to innovative companies. Rothaermel et al. (2007) were the first authors to perform a literature review in the field of university entrepreneurship. They identified four streams in this area of study: (i) entrepreneurial research university, (ii) productivity of technology transfer offices, (iii) new firm creation, and (iv) environmental context including networks of innovation. University spin-offs (USOs) are very special start-up companies and for this they are not fully comparable to other companies. The USOs have been studied giving rise to a huge and growing literature. The definitions are various but all of them refer to the transfer of knowledge and technologies from the university to the academic spin-off. The transferred technology might be formalized intellectual property, e.g. the transfer of a patent via technology licensing (Di Gregorio and Shane, 2003). Alternatively, the transfer may consist of non-formalized technologies and research results (Djokovic and Souitaris, 2008). The discussion on transferred knowledge and technologies usually focusses on research results from natural sciences, computer sciences or engineering.

Literature review
The literature on academic spin-off presents definitions, typologies, and stages of development of academic spinoffs (Clarysse and Moray, 2004;Nicolaou and Birley, 2003) and best practices of TTOs toward spin-offs (Rothaermel et al., 2007). Egeln et al. (2003) relax the criterion that academic spin-offs must commercialize universities' research results and denote as competence spin-offs those start-ups for which special skills and expertise the founders acquired at a university were essential to create the new firm. In recent years, universities have focused more on the creation of spin-off companies as a means of transferring the knowledge generated by their research activities. Scholars have proposed over the years different definition of spin-off. Roberts and Malone (1996), for example, defined spin-offs as a mechanism in which governments seek to generate economic impact from their R&D, by transferring technology from the R&D function to a commercial organization. In the same way, Rogers and Takegami (2001) defined spin-offs as those companies based on the parent R&D organizations, namely, the government R&D laboratory, the University, the University research center, and private R&D organizations. Nicolaou and Birley (2003) proposed a definition of spin-off that takes into account the human element of the spin-off itself. According to Castillo-Vergara (2015) quoting Beraza and Rodríguez (2012), USOs are entrepreneurial initiatives supported by members of the university community who base their activities on the enhancement of new processes, products and services on the knowledge acquired and the results obtained at the University. Shane (2004) defined an academic spin-off as "those high-tech companies whose core business is based on the commercial valorization of results of a scientific and technological research". More recently, Conti et al. (2011) defined spin-off companies as "those companies that germinate from a University, where a group of researchers compose the entrepreneurial unit aiming at the exploitation of skills and results from the research developed within the University". Regardless the definition adopted, it is possible to state that an academic spin-off involves the transfer of a core technology from an academic institution into a new company, and whose founders may include the inventor academic who may or may not be currently affiliated with the academic institution.
In terms of their impact at the university-level, research has shown that universities' research quality and orientation (Crespi et al., 2011;Di Gregorio and Shane, 2003), and the universities' IP policies Schankerman, 2004, 2008;Goldfarb and Henrekson, 2003), influence this decision. At the regional level, the Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.12, No.23, 2021 strength of the local cluster and the availability of early stage investors influence this decision (Friedman and Silberman, 2003;Lockett and Wright, 2005;Powers and McDougall, 2005;Shane and Stuart, 2002).
Although academic entrepreneurship has been a phenomenon that has existed, in particular in the experiences of USA University which first gave the birth to this particular form of entrepreneurship, only recently has taken a prominent place in the political agendas of governments. Nowadays, the race to knowledge, to innovation, and to science and technology is global and has a direct impact on the economic performance, growth and prosperity of all regions. On this point of view Siegel and Wright (2015) identified two changes since 2012: first, the involvements of more stakeholders in the process of academic entrepreneurship; second, universities have become more strategic in their approach to this activity. More recently, Fini et al. (2016) performed a longitudinal and multi-level cross country study (i.e., Italy, Norway, and UK) to test whether the national and university level initiatives have an influence on the number and quality of those created spin-offs. Scholars believe that USOs are important for regional economic development (Astebro and Bazzazian, 2011;Bramwell and Wolfe, 2008;Breznitz et al., 2008;Breznitz and Feldman, 2012). The well-known examples of new industrial cluster growth such as Silicon Valley in California (Saxenian, 1996), Route 128 in Massachusetts (Saxenian, 1996).
The literature review has selected a void with regard Italy especially in the empiric studies aimed to identify the USOs' financial performance. The work aims to fill the gap and contribute to the research on the subject proposing a comparison between USOs and innovative start-ups.

Methodology
In this paper data from multiple balance sheets and income statements are compared over time and space using the financial statement analysis (Lev, 1974;Foster, 1986;Ou and Penman, 1989;Chukwunweike, 2014;Rinaldo and Endri, 2020;Mun and Tashmanov, 2021;Solanki and Devmurari, 2021). The over time analysis refers to the comparison of data from the same company, while comparison over space means the confrontation of data from different companies. The analysis concerns Italian university spinoffs vs Italian innovative startup and SMEs. University spinoffs and innovative companies have been identified through the portals SpinoffItalia and Startup Infocamere respectively. Profitability, structure and efficiency ratios have been computed using data on financial statements gathered from Amadeus Bureau Van Dijk for the period 2018-2020.
The objectives of this study are: to investigate the profitability, liquidity, structure and efficiency profile of univeristy spinoffs and innovative companies; -to compare the profitability, liquidity, structure and efficiency status of university spinoffs and innovative companies; Adopting the ratio analysis method, the analysis focuses on these indicators: ROE, ROA, Profit margin, EBITDA margin, EBIT margin AND Cash flow/Operating revenue ratio for the profitability; Current ratio, Liquidity ratio, Shareholders liquidity ratio, Solvency ratio and Gearing ratio for the liquidity and structure analysis. Profit per employee, Operating revenue per employee, Cost of employee/Operating revenue ratio, Average cost of employee, Working capital per employee and Total asset per employee are used in the study of the efficiency profile.
Additionally, to examine whether the difference in profitability, liquidity, structure and efficiency of the innovative companies is statistically different from that of university spinoff, the Student's t-test is employed to check the hypothesis that the means of the two samples are the same. Specifically, hypothesis testing is based on the following provisions to be verified: H0: there is no significant difference in terms of profitability among innovative companies and university spinoffs; H1: there is significant difference in terms of profitability among innovative companies and university spinoffs; H0: there is no significant difference in terms of liquidity and structure among innovative companies and university spinoffs; Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.12, No.23, 2021 43 H1: there is significant difference in terms of liquidity and structure among innovative companies and university spinoffs; H0: there is no significant difference in terms of efficiency among innovative companies and university spinoffs; H1: there is significant difference in terms of efficiency among innovative companies and university spinoffs.
Looking at test statistics and critical values associated with the mean, it is possible to make inferences about the hypothesis. So, for P-value ≤ α (α = 0.05) the null hypothesis is rejected. For P-value > α (α = 0.05), the null hypothesis is accepted.

Results and discussions
Objective 1): to investigate the profitability, structure and efficiency profile of university spinoffs and innovative companies.
The following table resume the profitability ratios for innovative startup and SMEs. They record negative ROE for the period 2018-2019. Innovative startup and SMEs have recorded a ROE of -4.10% in 2018 which reached -4.71% in 2020. The ROA in 2018 stood at a value of 0.20% to then reach 0.34% in 2020, recording a worsening in 2019 (-0.22%). Profit margin in 2018 is 2.30% showing a progressive decrease in the following two years until reaching 0.83% in 2020. The same downward trend can be observed for the EBITDA margin: starting from an average value of 9.05% in 2018, the ratio decreases assuming the value of 8.56% and 7.91% in 2019 and 2020 respectively. The EBIT margin also shows a reduction: from the 3.51% recorded in 2018, it drops to an average value of 1.84% in 2020. The Cash flow/Operating revenue ratio remains constant at 6.65% in 2018 and 2019 and then decreases to 6.03% in 2020.   For the structure status, analysis show that innovative startup and SMEs have an average Solvency ratio with an increasing trend in the considered period: starting from a value of 32.31%, it progressively increases until it reaches 36.50% in 2020. The average incidence of debt on shareholders' equity expressed through the Gearing ratio records a reduction, going from 126.30% in 2018 to 122.94% in 2020.   ROE of university spinoffs passes from 2.93% in 2018 to 5.73% in 2020. On the contrary, the ROA records a decreasing trend: starting from 5.64% it stood at 4.62% in 2019 up to 3.56% in 2020. Profit margin from 6.84% grows to 7.77% in 2019 and reaches 7.38% in2020. EBITDA margin starting from an average value of 10.46% in 2018, rises to 12.89% in 2019 an then recorded a slight reduction, settling at 12.41%. The same trend can be observed for EBIT margin which starts from 7.48% in 2018, goes up to 8.49% in the following year and then drops to 7.66% in 2020. Cash flow/Operating revenue ratio is mostly stable at 9% (9.41% in 2018; 9.16% in 2019; 9.13% in 2020).        Objective 2): to compare the profitability, structure and efficiency status of university spinoffs and innovative companies.
The following tables show the differences between the means and the results of t-test analysis for profitability status among university spinoffs and innovative companies for the three-years period of analysis. The null hypothesis is tested at α=5% level of significance.
Negative values of the differences between the averages are mainly observed in 2018, proving that academic spinoffs record higher values for indicators than innovative companies. The exceptions are Gearing, Operating revenue per employee, Working capital for employee and Total assets for employee. With reference to the first indicator, the positive difference indicates the higher indebtedness of innovative companies compared to unviersity spinoffs. With reference to the positive values found for the remaining three indicators, this indicates a higher efficiency of innovative companies.
For analysis referred to 2018, the null hypothesis is accepted in ROE, EBITDA margin, Cash flow/Operating revenue ratio, Current ratio, Liquidity ratio, Shareholders liquidity ratio, Profit per employee and Working capital per employee since they have a p-value above the level α=5%. The null hypothesis is rejected in ROA, EBIT margin, Solvency ratio (Asset based), Gearing, Operating revenue per employee, Average cost of employee and Total assets per employee. Thus, for this year of investigation no significant difference between ROE, EBITDA margin, Cash flow/Operating revenue ratio, Current ratio, Liquidity ratio, Shareholders liquidity ratio, Profit per employee and Working capital per employee is observed among innovative companies and academic spinoffs.  Results of t-test show that the null hypothesis is accepted in Cash flow/Operating revenue ratio, Current ratio, Shareholders liquidity ratio, Profit per employee, Working capital per employee and Total assets per employee. The null hypothesis is rejected in ROE, ROA, Profit margin, EBITDA margin, EBIT margin, Liquidity ratio, Solvency ratio (Asset based), Gearing, Operating revenue per employee and Average cost of employee whose pvalue is less than the level α=5%. So, for this year no significant difference between Cash flow/Operating revenue ratio, Current ratio, Shareholders liquidity ratio, Profit per employee, Working capital per employee and Total assets per employee is observed comparing innovative companies and academic spinoffs samples.  With reference to 2020, positive differences in average values are observed only for the Shareholders liquidity ratio, Gearing, Operating revenue per employee and Total assets per employee indicators. In all other cases, the average values recorded for academic spinoffs are higher than those recorded for innovative companies showing higher levels of profitability, liquidity and efficiency.
The null hypothesis is accepted only for EBITDA margin, Cash flow/Operating revenue ratio, Shareholders liquidity ratio, Profit per employee, Working capital per employee and Total assets per employee proving no significant differences between the two samples.

Conclusions
This investigation is part of a line of research related to the PRIN project "University spin-offs: competitiveness, attractiveness and value" aimed at analyzing the performance, riskiness and financial policies as well as the creation of value of academic spinoffs compared to innovative companies. In particular, this study aims to ascertain the differential performance of Italian university spinoffs compared to innovative companies. For this reason, the profitability, liquidity, structure and efficiency ratios were analyzed. Findings show that Italian university spinoffs are characterized throughout the period under analysis (2018-2020) by better values of profitability, liquidity, structure and efficiency indicators if compared to start-ups and innovative SMEs. Based on the T-test statistical significance, a prevalence of rejection of the null hypothesis is observed especially for the years 2019 and 2020, highlighting the existence of significant differences in the profitability, liquidity, structure and efficiency profile between two groups of companies. horizon could in fact allow the creation of an adequate information base for identifying trends over the period, building historical series consistent with the fairly recent phenomenon of university spin-offs.