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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Last Updated 1/15/97 by Geoff Goldman & Dennis Valencia
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