Capital Structure Decisions in Swedish Biotechnology Firms: The Role of Intellectual Capital and Innovation Activities

Kritthana Kimuam (), Björn Berggren and Ida Ayu Agung Faradynawati
Additional contact information
Kritthana Kimuam: Department of Real Estate and Construction Management, KTH Royal Institute of Technology, 10044 Stockholm, Sweden
Björn Berggren: Department of Real Estate and Construction Management, KTH Royal Institute of Technology, 10044 Stockholm, Sweden
Ida Ayu Agung Faradynawati: Department of Real Estate and Construction Management, KTH Royal Institute of Technology, 10044 Stockholm, Sweden

IJFS, 2025, vol. 13, issue 1, 1-16

Abstract: Biotechnology firms operate in a highly innovative and capital-intensive environment, characterized by high levels of R&D, long product development periods, significant regulations, and high levels of uncertainty. These firms rely heavily on intangible assets, such as intellectual capital and innovation. Consequently, intellectual capital and innovation activities play a crucial role in financial strategies and capital structure decisions. This study aims to examine how intellectual capital and innovation activity influence capital structure decisions of biotech firms in Sweden. In this paper, financial data of 1528 companies from 2012 to 2022 were analyzed. Using logistic regression modeling, the results showed that biotech firms with higher intellectual capital are more likely to issue equity whereas those with greater innovation activity tend to rely more on debt financing. These findings underscore the complexities of financial strategy in the biotech sector, emphasizing the need for flexible capital structure management. Moreover, policymakers should focus not only on equity availability but also on ensuring access to debt financing, as both are crucial for sustaining biotech innovation and growth.

Keywords: biotechnology; intellectual capital; innovation activity; capital structure; Sweden (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7072/13/1/43/pdf (application/pdf)
https://www.mdpi.com/2227-7072/13/1/43/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijfss:v:13:y:2025:i:1:p:43-:d:1605751

Access Statistics for this article

IJFS is currently edited by Ms. Hannah Lu

More articles in IJFS from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().