Frontiers of Entrepreneurship Research
1996 Edition


Firm specific capabilities as a determinant of the 'Market Value Added' by biotechnology companies.

David L. Deeds, Temple University

Joseph Coombs, Temple University


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Introduction
Theory and Hypotheses
Methodology
Results
Discussion and Conclusion
References


ABSTRACT

This paper attempts to link two important issues in the field of strategy and entrepreneurship: wealth creation and firm specific capabilities. The paper uses G. Bennett Stewart's Market Value Added (MVA) as the dependent variable and a series of measures of firm specific capabilities as the independent variables. The model is tested on a sample of 89 biotechnology firms. The results provide strong support for the hypothesized relationship between firm specific capabilities and the creation of wealth. Specifically, the data supports a strong relationship between the scientific capabilities of a biotechnology firm and wealth creation. The results clearly support the idea that firm specific resources create shareholder wealth.

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1997 Babson College All Rights Reserved
Last Updated 1/15/97 by Geoff Goldman & Dennis Valencia

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