Firm-Specific Resources and Wealth Creation in High-Technology Ventures: Evidence from Newly Public Biotechnology Firms

David L. Deeds, Dona Decarolis and Joseph E. Coombs

Entrepreneurship Theory and Practice, 1998, vol. 22, issue 3, 55-73

Abstract: We explore the relationship between wealth creation in high-technology ventures and firm-specific resources. We argue that Market Value Added is a particularly appropriate measure of entrepreneurial performance because of its focus on wealth creation, which is the essence of entrepreneurship. We present a model of wealth creation in new ventures based on the resource-based theory of firm behavior. The model suggests that firm-specific research and scientific capabilities are associated with wealth creation. The model is tested on a sample of 89 biotechnology firms. The results provide strong evidence for the hypothesized relationship between firm-specific capabilities and wealth creation in new ventures.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:22:y:1998:i:3:p:55-73

DOI: 10.1177/104225879802200303

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