Strategic Groupings Of US Biotechnology Initial Public Offerings And A Measure Of Their Market Influence

This study verifies the existence of strategic groups among biotechnology firms that have filed for an initial public offering (IPO). We found three distinct groupings based on the dimensions of competitive scope and growth. Differences also exist between these groupings and an aspect of market influence – the ability to attract strategic partners. We found that biotechnology IPOs that seek greater breadth in competitive scope and growths also have more alliance partners. This paper adds to our knowledge of the bio-pharmaceutical market-sector and the strategic intentions of firms in an emerging, disruptive industry and their ability to attract strategic coalition partners

Market feedback, investment constraints, and managerial behavior

This paper examines the joint role of market feedback and investment constraints on managerial behavior. Using a sample of UK fixed price initial public offerings, we show that underperformance of share returns at the IPO significantly affects managerial investment decisions in the period after the offering. Firms with better investment opportunities and proportionately lower fixed (higher intangible) assets are more sensitive to negative market feedback. Over the longer term, the more responsive firms perform significantly better than their non-responsive counterparts. The findings contribute to the debate on the informational advantage of managers over investors and present strong evidence that the market, on aggregate, can provide a superior assessment of a firm's opportunities. Managers who are able to respond to negative market feedback can significantly improve their firm's future prospects

An Examination of the Relationship Between Firm Size, Growth and Liquidity in the Neuer Markt

With the increasing competitive importance of scientific innovations associated with the new economy it has become critical to understand the dynamics of its' firm growth during this early and potentially critical stage of development. This study analyses the relationship between firm size and growth for Neuer Markt firms from its inception in 1997 until 2000 Evidence supports the hypothesis that smaller firms on the Neuer Markt grew faster than larger firms. Further, by using an alternative specification for growth, this study provides evidence that liquidity constraints impact firm growth, even when controlling for firm size and age. Results further indicate that while smaller firms grew faster in the new economy, larger firms grew faster in the old economy, supporting the notion that smaller German firms may be playing a larger role than previously in bringing new technologies to the market place. -- Angesichts der zunehmenden Bedeutung wissenschaftlicher Innovationen , die mit der "neuen Ökonomie" in Verbindung stehen, ist es wichtig geworden, die Wachtumsdynamik dieser Firmen in einem frühen und möglicherweise entscheidenden Entwicklungsstadium zu verstehen. Dieses Papier untersucht für Firmen am Neuen Markt die Beziehung zwischen Größe und Wachstum in der Zeit von 1997 bis 2000. Es gibt Hinweise, dass kleinere Firmen am neuen Markt stärker wachsen als große Unternehmen.. Desweiteren gibt es nach dieser Studie Anzeichen, dass Liquiditätsbeschränkungen das Firmenwachstum beeinflussen, selbst wenn man für Größe und Alter kontrolliert. Weiterhin wird nahegelegt, dass kleine Firmen in der "neuen Ökonomie" schneller als große Firmen wuchsen, während in der "alten Ökonomie" das umgekehrte galt. Dies unterstützt die Vorstellung, dass kleinere deutsche Firmen heute möglicherweise eine größere Rolle als früher spielen, wenn es darum geht, neue Technologien auf den Markt zu bringen.

An empirical taxonomy of technology alliance contracts

Although contracts are characterized by a certain logical and artifactual unity, the typical approach of economic and organizational studies focuses on particular contract clauses. Another common perspective, that addresses contracts as unitary entities, directs the attention to the choice between axiomatically defined alternative governance forms, with little or no investigation of empirical types. This state of things reflects the lack of an accepted framework for the development and testing of hypotheses about contract design. This study tries to redress this situation by analyzing actual contracts as configurations of a wide array of elements. In developing an analytical framework, this study develops a perspective that considers contracts as an organizational phenomenon, expands the set of mechanisms considered beyond incentive provisions and pricing structures, and includes procedural elements inspired both by organizational theory and by the empirical literature on contracting. The constructs so identified are applied to the analysis of a set of pharmaceutical biotechnology agreements. We employed categorical principal component analysis to determine underlying dimensions that differentiate among different contracts. Cluster analysis then produced an empirical taxonomy of these technology agreements

What's in a name and when does it matter? The hot and cold market impacts on underpricing of certification, reputation and conflicts of interest in venture capital backed Korean IPOs

This article analyses the impact of the participation of venture capital (VC) firms on underpricing in 372 businesses brought to IPO during the period 1999-2001 in KOSDAQ. Korea's second-tier stock market, KOSDAQ, has grown dramatically since 1999 and about half of the firms listed in KOSDAQ during this period were VC-backed, thus providing a good testing ground for empirical analysis. We measure VC participation in terms of pre IPO share-ownership by VC firms and attempt to differentiate IPO impacts between VCs grouped in terms of their reputation (measured by their dominance of the VC market, and by their affiliation in terms of ownership by banks and security companies). In estimating impacts we control for a wide range of variables which may affect the extent of underpricing. These include uncertainty inducing factors such as the age, size, profitability, leverage, and technical riskiness (measured by sector and R&D intensity) of the firm brought to IPO. We also control for market conditions using proxies for hot and cold market effects based on the numbers of contemporaneous IPOs, underpricing trends and market price movements. Finally in addition to allowing for the impact of underwriting quality we control for share overhang and price revision effects. We find that, controlling for other relevant factors, pre-IPO ownership by VCs has an insignificantly negative impact on underpricing in both hot and cold markets. However in cold markets reputational effects within the VC group do matter. In those conditions the top 3 VCs and those owned by or affiliated with banks are significantly associated with lower underpricing. The same is true for the quality of underwriting. However in hot market conditions none of these effects are present.Initial Public Offering; Underpricing; Venture Capital; Certification; Conflict of Interest, Informational Advantage

New Hampshire University Research and Industry Plan: A Roadmap for Collaboration and Innovation

This University Research and Industry plan for New Hampshire is focused on accelerating innovation-led development in the state by partnering academia’s strengths with the state’s substantial base of existing and emerging advanced industries. These advanced industries are defined by their deep investment and connections to research and development and the high-quality jobs they generate across production, new product development and administrative positions involving skills in science, technology, engineering and math (STEM)

Local Academic Science Driving Organizational Change: The Adoption of Biotechnology by Japanese Firms

The local academic science base plays a dominant role in determining where and when biotechnology is adopted by existing firms or -- much more frequently -- exploited by new entrants in the U.S. In Japan this new dominant technology has almost exclusively been introduced through organizational change in existing firms. We show that for the U.S. and global pharmaceutical business -- biotechnology's most important application -- the performance enhancement associated with this organizational change is necessary for incumbent firms to remain competitive and, ultimately, to survive. Japan's sharply higher organizational change/new entry ratio compared to the U.S. during the biotech revolution is related to Japan's relatively compact geography and institutional differences between the higher-education and research funding systems, the venture capital and IPO markets, cultural characteristics and incentive systems which impact scientists' entrepreneurialism, and tort-liability exposures. Both local science base and pre-existing economic activity explained where and when Japanese firms adopted biotechnology, with the latter playing a somewhat larger role. De nova entry was determined similarly as if entry and organizational change are alternative ways of exploiting the scientific base with relative frequency reflecting underlying institutions. While similar processes are at work in Japan and America, stars in Japan induce entry or transformation of significantly fewer firms than in the U.S. and preexisting economic activity plays a greater role. We find no such significant difference for entry of keiretsu-member and nonmember firms within Japan.

Diversification in small firms: Does parental influence matter?

Diversification is a common goal for many small firms, yet research examining whether small firm ownership structure influences their use of the tactic is limited. As such, this paper provides one of the first empirical investigations of the subject by examining whether the presence of a corporate parent positively influences the likelihood that small firms will utilize diversification. Results indicate that small firms with corporate parents are more likely to use both related and unrelated diversification than comparable firms that are independently owned. Such findings are noteworthy because diversification may be more beneficial for small, independently owned firms, yet small, subsidiary firms appear to be better able to utilize diversification. Implications of these findings are discussed

Embracing a systems perspective of innovation – Evidence from Ireland on the use of innovation links, 1991 to 2002

Conceptual perspectives on the innovation process have moved dramatically in the past decade from a linear model of the innovation process to one based on an evolutionary or systems perspective of innovation. This has also been referred to as moving from a closed to an open innovation paradigm. In this systems perspective, innovation networks are critical with innovation being driven by interaction and co-operation between firms and other organisations. Empirical research has supported this paradigmatic shift by providing evidence that firms engaged in innovation networks are more likely to undertake innovation, have higher sales from innovation and be growing faster. From a resource based view of the firm this might suggest that the competitive position of the firm is due to their internal resource base being enhanced through external innovation links. For small firms, innovation links may be particularly important in providing access to financial, technological and human resources and increasing the probability of innovation. Together, the conceptual and empirical literatures have encouraged changes in policy initiatives to promote innovation resulting in the formulation of regional and national innovation strategies. This paper draws on longitudinal plant-level survey data in Ireland from 1991 to 2002 (Irish Innovation Panel) to determine if evidence exists to support the conceptual perspective that innovation links have increased in recent years. The data analysis also examines if there have been changes in the intensity of innovation links, and if differences exist in innovation links by firm size, sector, ownership or location over the period. The paper also compares the use of horizontal and vertical links and examines if this has changed over the 1991 to 2002 period. This is significant given increased emphasis on technology transfer initiatives by the public sector in recent years. The paper also examines the extent to which the pattern of innovation links reflect the underlying innovation system and public policy initiatives to promote technology transfer and networking as implemented throughout Ireland from 1991 to 2002.