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

Theory and Hypotheses
Discussion and Conclusion


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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