LAUSR

Abstract Although the promotion of technology business incubators (TBIs) has been regarded as an effective strategy utilized by governments to facilitate technology innovation and sustainable economic growth, few studies have considered the network structure of TBIs when measuring their operational performance. In this study, we first propose a dynamic two-stage slacks-based measure model to assess the sustainable efficiency of incubators by decomposing the operational process into investment attraction stage and incubation stage. Within this framework, we treat incubating fund and new entrants as intermediate products, and regard the number of incubating enterprises as an undesirable output of the incubation stage to capture the carry-over effect between two successive periods. We then introduce the definitions of the period, stage and period stage efficiencies. The proposed method is employed to estimate the operational performance of China’s regional state-level technology business incubating service systems during 2013–2017. The results show that the negligence of the dynamic effect of the typical carry-over factor may lead to the underestimation of the incubating service systems’ overall efficiency as well as the efficiency of the incubation stage. The relatively lower incubation efficiency is the main reason for the inefficiency of Chinese technology business incubating service system. Moreover, significant geographic disparities in efficiencies among regions are observed. The western area enjoys the best performance, followed by the eastern area, while the central area performs the worst. We further explore the influencing factors on the efficiencies of incubating service systems and find that human capital is conducive to the improvement in the efficiencies of the two sub-stages. However, government support and technology progress contribute significantly to the investment attraction stage, while foreign direct investment has a positive effect only on the incubation stage. Finally, some useful policy implications are achieved.