The Peripheral Halo Effect: Do Academic Spinoffs Influence Universities' Research Income?: The Peripheral Halo Effect

Extant literature has drawn attention to the halo effect' of the good reputation of a core organizational activity on the outcome of a peripheral activity. We contribute to the literature on organizational reputation by illustrating a halo effect in the opposite direction - from the periphery to the core. We show that developing a reputation for a peripheral activity (in our context, universities' social impact via spinoffs) may have positive spillovers for core organizational activities (in our context, university research), a phenomenon we term the peripheral halo effect'. We also show that this effect is more prominent for high-status than for low-status organizations. Our research also contributes to the academic-entrepreneurship literature by revealing that spinoff portfolios can generate income for universities not only directly via equity positions but also indirectly via reputational benefits.