Frontiers of Entrepreneurship Research
1997 Edition

Return to 1997 Topical Index

Order hard copy editions of Frontiers of  Entrepreneurship Research by mail


THE QUEST FOR LEGITIMACY: A STUDY OF BIOTECHNOLOGY IPO'S
David L. Deeds, Temple University
Paul Y. Mang, The University of Texas at Austin
Michael Frandsen, The University of Texas at Austin

INTRODUCTION
THEORETICAL BACKGROUND
HYPOTHESES
METHODOLOGY
    The Sample and Data
    Variables
RESULTS
CONCLUSION
REFERENCES
TABLE  1
FIGURE  1

ABSTRACT

This paper examines the determinants of an entrepreneurial firm's legitimacy and the impact of legitimacy in the amount of capital raised by biotechnology firm's IPO. We first present a model of the determinants of firm level legitimacy, which includes measures of firm level characteristics and actions, and industry legitimacy. The model is then tested on a sample of 108 initial public offerings from biotechnology firms using structural equation modeling. Our results indicate that amount of capital raised by a biotechnology firm's IPO is positively related to firm level legitimacy  and the legitimacy of the industry at the time of the offering.
 
 
Return to 1997 Topical Index



© 1997 Babson College All Rights Reserved
Last Updated 03/13/98