Abstract
In this paper, we address the question whether there exists differences in the determinants that support survival versus success of small and medium-sized high-tech firms. We examine this question in the context of Finnish biotechnology industry by analyzing the survival of all dedicated biotechnology firms in the period of 1978–2008. We argue and show that the success and survival of firms are not necessarily driven by similar determinants. Specifically, we find that while the role of different types of alliances, focused market scope as well as legitimacy of the industry seem to be important both in ensuring survival and enhancing successful performance, determinants related to sources of financing, clustering, and patenting show differences in terms of how they relate on survival and success.
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Notes
The sectors are biopharmaceuticals, diagnostics, agrobiotech, bioinformatics, biomaterials, bioproduction, industrial enzymes, the environment, functional food, bioenergy, devices, and R&D services.
Helsinki, Espoo, Vantaa, and Kauniainen form the capital region cluster.
Although the variable may not be able to differentiate between firms that receive a large amount of financing from those that only receive a small amount, we also estimated models in which the construct was operationalized as the cumulative number of financing placements made to a firm. These two operationalizations led to the same results.
These models are available by request.
We also test models in which a squared industry-level density variable is included. This does not change the results.
Because the sub-sample of service-oriented firms includes only 350 observations, the results should be interpreted with caution. The market scope variable and sector dummies are not included in model 17 because service firms predominantly operate in one sector. Due to the small number of observations in the service sector sub-sample, we do not add lower-level alliance variables into the models.
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Pajunen, K., Järvinen, J. To survive or succeed? An analysis of biotechnology firms. Small Bus Econ 51, 757–771 (2018). https://doi.org/10.1007/s11187-017-9963-6
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DOI: https://doi.org/10.1007/s11187-017-9963-6