How university and industry knowledge interact to determine local entrepreneurship

This article discusses and empirically investigates whether and how university knowledge and industry knowledge <italic>interact</italic> to determine the creation of knowledge-intensive firms (KIFs) in a geographic area. In line with the knowledge spillover theory of entrepreneurship (KSTE), we find that both knowledge types matter for stimulating local entrepreneurship. However, our findings document that university knowledge exerts an effect just in areas where industry knowledge is low. In other words, the two types of knowledge do not generate synergetic gains, but are substitutes.