To survive or succeed? An analysis of biotechnology firms

In this paper, we address the question whether there exists differences in the determinants that support survival versus success of small and medium-sized high-tech firms. We examine this question in the context of Finnish biotechnology industry by analyzing the survival of all dedicated biotechnology firms in the period of 1978–2008. We argue and show that the success and survival of firms are not necessarily driven by similar determinants. Specifically, we find that while the role of different types of alliances, focused market scope as well as legitimacy of the industry seem to be important both in ensuring survival and enhancing successful performance, determinants related to sources of financing, clustering, and patenting show differences in terms of how they relate on survival and success.

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title: Strategic alliances and the rate of new product development: An empirical study of entrepreneurial biotechnology firms
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title: Alliances are not enough explaining rapid growth in biotechnology firms
abstract: The goal of this paper is to understand the factors explaining differential growth in biotechnology firms. It aims also to add some caution to the generalized opinion according to which alliances are the key factor behind new firm performance. The theoretical framework is based on competence, and evolutionary theories of the firm. These approaches underline the fact that within similar industries and technologies firms display clear and persistent variety in performance. Some 60 dedicated biotechnology firms (DBFs) were interviewed across Canada; half of them experienced rapid growth. A few variables, including alliances, explained much of the fast growth.

title: Strategic Alliances and the Learning Life-Cycle of Biotechnology Firms
abstract: Strategic alliances in the biotechnology industry are used as an inter-organizational learning device, in addition to their ability to provide financial resources, vertical and horizontal integration facilities, and legitimacy to dedicated biotechnology firms (DBFs). However, despite the advantages associated with strategic alliances, the literature accounts for hazards and disadvantages as well. This paper analyzes the relationship between organizational life-cycle and the formation of strategic alliances based on a population of 554 new biotechnology firms (DBFs) in a 15-year period. Using event history analysis, this study tests two propositions: that the inability of DBFs to form strategic alliances will be associated with organizational death and that firm growth will make it possible to reduce network learning through alliances (exploration stage of learning), allowing the firm to enter a period of internalized learning (exploitation). These propositions are supported by the data. The findings showed that lack of alliances is associated with organizational death, that learning through alliances is not a cumulative process, and that firm life-cycle alliance formation is not linear. Although alliance-based learning is vital to biotechnology firms at the early stages of their formation, when learning is associated with exploration, at later phases of the life-cycle, learning is internally exploited through intrafirm networks. The results also provide some evidence that another phase of external, network based, learning follows.

title: Cooperation, competition, and innovative capability: a panel data of European dedicated biotechnology firms
abstract: Small and medium high-technology firms usually develop upstream and downstream ties in order to perform their new product development process. Many of these alliances are characterized by co-opetition dynamics, that is, partners collaborate and compete simultaneously. Traditionally, competitive and cooperative theory has been analyzed as different research streams. Although scholars and managers have recognized that striking a balance between both strategies (co-opetition) plays a key role in the performance of innovation process, little empirical research shows evidence about this relation. In this paper, firstly, a review of theoretical perspectives of co-opetition is made, and then, we identify alternative strategic behaviors from the combination of competitive and cooperative attitudes. Finally, we show the results from a study of a sample of European dedicated biotechnology firms, where we analyze the effect of co-opetitive strategy on technological diversity and new product development.

title: Alliance type, alliance experience and alliance management capability in high-technology ventures
abstract: Building on the recent theoretical notion that a firm's alliance management capability can be a source of competitive advantage (Dyer and Singh, 1998; Ireland, Hitt, and Vaidyanath, 2002), we empirically investigate the effect of alliance-specific and firm-level factors on a high-technology venture's alliance management capability. We define alliance management capability as a firm's ability to effectively manage multiple alliances. To test the effect of alliance type on alliance management capability, we first establish that the relationship between a high-technology venture's R&D alliances and its new product development is inverted U-shaped, regardless of alliance type (i.e., upstream, horizontal, and downstream alliances). Then, we posit that different alliance types place differential demands on a firm's alliance management capability due to the different types of partners involved and due to the different types of knowledge being transferred. Finally, we argue that firms build an alliance management capability through cumulative experience with strategic alliances over time. We test the effects of alliance type and alliance experience on alliance management capability by drawing on a sample of 2,226 R&D alliances entered into by 325 global biotechnology firms in the twenty-five year period between 1973 and 1997. We find that alliance type and alliance experience moderate the relationship between a high-technology venture's R&D alliances and its new product development. These results provide some preliminary empirical evidence for the existence of an alliance management capability. The results further highlight the relevance of alliance management capability for high-technology ventures since alliance experience appears to be a distinct construct, different from firm age and firm size. Taken together, these results underscore both the ability of a high-tech venture to create a competitive advantage based on its alliance management capability and the risks alliances pose if the firm's alliance activity exceeds its alliance management capability. Managers in high-tech ventures need to consider their current alliance portfolio as well as potential alliances within the context of their firm's alliance management capability.

title: Alliance-Based Competitive Dynamics
abstract: Do rivals' alliances increase or decrease the competitive pressure experienced by a firm? Linking ecological and economic research on organizations, we propose that the effects of rivals' horizonta...

title: Interorganizational alliances and the performance of firms: A study of growth and innovation rates i
abstract: This paper investigates the relationship between intercorporate technology alliances and firm performance. It argues that alliances are access relationships, and therefore that the advantages which a focal firm derives from a portfolio of strategic coalitions depend upon the resource profiles of its alliance partners. In particular, large firms and those that possess leading-edge technological resources are posited to be the most valuable associates. The paper also argues that alliances are both pathways for the exchange of resources and signals that convey social status and recognition. Particularly when one of the firms in an alliance is a young or small organization or, more generally, an organization of equivocal quality, alliances can act as endorsements: they build public confidence in the value of an organization's products and services and thereby facilitate the firm's efforts to attract customers and other corporate partners. The findings from models of sales growth and innovation rates in a large sample of semiconductor producers confirm that organizations with large and innovative alliance partners perform better than otherwise comparable firms that lack such partners. Consistent with the status-transfer arguments, the findings also demonstrate that young and small firms benefit more from large and innovative strategic alliance partners than do old and large organizations.

title: Don't go it alone: alliance network composition and startups' performance in Canadian biotechnology
abstract: We combine theory and research on alliance networks and on new firms to investigate the impact of variation in startups’ alliance network composition on their early performance. We hypothesize that startups can enhance their early performance by 1) establishing alliances, 2) configuring them into an efficient network that provides access to diverse information and capabilities with minimum costs of redundancy, conflict, and complexity, and 3) judiciously allying with potential rivals that provide more opportunity for learning and less risk of intra-alliance rivalry. An analysis of Canadian biotech startups’ performance provides broad support for our hypotheses, especially as they relate to innovative performance. Overall, our findings show how variation in the alliance networks startups configure at the time of their founding produces significant differences in their early performance, contributing directly to an explanation of how and why firm age and size affect firm performance. We discuss some clear, but challenging, implications for managers of startups.

title: Picking winners or building them? Alliance, intellectual, and human capital as selection criteria in venture financing and performance of biotechnology startups
abstract: In the entrepreneurial setting, financial intermediaries such as venture capital firms (VCs) are perhaps the dominant source of selection shaping the environment within which new ventures evolve. VCs affect selection both by acting as a ‘‘scout’’ able to identify future potential and as a ‘‘coach’’ that can help realize it. Despite the large literature on the role of VCs in encouraging startups, it is generally taken for granted that VCs are expert scouts and coaches, and so the ways in which VCs actually enhance startup performance are not well understood. In this study, we examine whether VCs’ emphasize picking winners or building them by comparing the effects of startups’ alliance, intellectual, and human capital characteristics on VCs decisions to finance them with the effects of the same characteristics on future startup performance. Our findings point to a joint logic that combines the roles: VCs finance startups that have strong technology, but are at risk of failure in the short run, and so in need of management expertise. Our findings thus support the belief in VC expertise, but only to a point. VCs also appear to make a common attribution error overemphasizing startups’ human capital

title: Interorganizational Endorsements and the Performance of Entrepreneurial Ventures
abstract: This paper investigates how the interorganizational networks of young companies affect their ability to acquire the resources necessary for survival and growth. We propose that, faced with great uncertainty about the quality of young companies, third parties rely on the prominence of the affiliates of those companies to make judgments about their quality and that young companies “endorsed” by prominent exchange partners will perform better than otherwise comparable ventures that lack prominent associates. Results of an empirical examination of the rate of initial public offering (IPO) and the market capitalization at IPO of the members of a large sample of venture-capital-backed biotechnology firms show that privately held biotech firms with prominent strategic alliance partners and organizational equity investors go to IPO faster and earn greater valuations at IPO than firms that lack such connections. We also empirically demonstrate that much of the benefit of having prominent affiliates stems from the transfer of status that is an inherent byproduct of interorganizational associations.

title: Inventive and Uninventive Clusters: The Case of Canadian Biotechnology
abstract: We examine factors influencing the relative productivity of different geographic locations. Our analysis of the Canadian biotechnology industry during the 1990s reveals that inventive and uninventive locations are distinguishable within small geographic areas corresponding to roughly 7000 postal addresses. Inventive locations exhibit greater resource scale and technological focus, as well as greater emphasis on R&D investment and public and private collaboration. Comparison of inventive locations across three major metropolitan areas - Vancouver, Toronto and Montreal - indicates, however, that inventive locations vary in their emphasis on technological scale and focus relative to collaboration, and thus that location advantages can develop in distinctive ways.

title: The Canadian environment for innovation and business development in the biotechnology industry: a firm‐level analysis
abstract: This paper is an empirical study of firm‐specific characteristics in the Canadian biotechnology sector. The research context examines the national system of innovation and regional infrastructure in place for the biotechnology industry. Literature on the Canadian biotechnology industry is not as extensive as studies on the US biotechnology industry. The current analysis shows that the Canadian sector is innovative and outward looking. One group of firms is more research oriented and the other is more product/process oriented. The first group emphasises the need to expand their science base through increased funding including inward foreign investment. The second group emphasises organisational needs such as improved feedback from product development and manufacturing to R&D; the development of manufacturing capabilities; the need to find new Canadian buyers; and the internationalisation of R&D through outward foreign direct investment. Place‐specific characteristics matter to the process of innovation and commercialisation for both groups: firms with high levels of R&D intensity seek access to scientists, universities, pharmaceutical companies and funding. Firms with low levels of R&D intensity seek access to manufacturing facilities and customers. An analysis of geographic or sectoral variation in strategies could not be accomplished due to data limitations. However, the results show the importance of Canadian participation in the internationalisation of innovation and commercialisation of biotechnology products. Such a trend needs to be considered in Canada's international negotiations pertaining to policies and regulations of international trade and investment (both inward and outward foreign direct investment) in biotechnology products.

title: A study of R&D, innovation, and business performance in the Canadian biotechnology industry
abstract: This study examines the relationships among R&D intensity, innovation measures, and business performance in the Canadian biotechnology industry, which experienced rapid growth in the number of firms and revenues between 1994 and 1997. A sample of 74 biotechnology companies in Canada is used for the analysis (the response rate of the postal questionnaire survey was 23.8%). In addition, geographic variations in barriers affecting innovation and factors influencing the business performance of biotechnology firms are analyzed. Results of the study show that R&D intensity correlates with patent measures, while innovation measured in terms of new product introductions is associated with business performance. Canadian firms attribute their business performance to internal advantages to a greater extent than external factors. The Canadian regulatory process is the greatest barrier to innovation. This study shows that while R&D and scientific breakthroughs drive innovation in the biotechnology industry, market demand plays a critical role in business performance of firms.

title: Start-up funding sources and biotechnology firm growth
abstract: Biotechnology is one of the world's fastest growing industries, expanding almost four times faster than the G-7 average for all sectors with global demand of US$50 billion in 2005. Biotechnology offers significant economic benefits, particularly in exports and job creation, as well as important health, safety and environmental benefits. Although it has the potential to be an important engine of economic development in the twenty-first century, its research-intensity and the associated long lead times have intensified the equity gap faced by all rapidly growing firms. As a result, there are concerns about start-up financing on growth and performance. Our results show that angel, venture and conventional capital have contributed significantly to R&D capital formation and sales growth. Conversely, the contribution of funding from government, IPO and alliance capital sources are unimportant for our sample of biotechnology firms. These are counter intuitive results for conventional capital's importance for firm growth rates. It was expected that venture capital would be most important; however, it may be that older firms with more mature products or products ready for market are chosen as bank customers. In that case, perhaps it makes sense that bank capital is correlated with higher growth rates.

title: Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures
abstract: New ventures, companies eight years or younger, play a major role in the development of an emerging, high-technology industry. Corporate-sponsored new ventures (those supported by an established corporation) and independent ventures (those founded by independent entrepreneurs) frequently battle for industry leadership and financial success. Whereas both venture types use technology to achieve financial and market success, little is known about the differences in their technology strategies. Technology strategy is the plan that guides a new venture's decisions on the development and use of technological capabilities. This strategy covers six major areas. The first is selecting the pioneering posture, where a venture decides whether or not be among the industry's first companies to introduce new products (technologies) to the market. The second is determining the number of products to be introduced to the market. The third is choosing the extent of a venture's use of internal and external R&D sources. Internal sources usually refer to in-house R&D activities. External sources may include purchasing or licensing of technology from other companies, or joining strategic alliances to acquire that technology. The fourth is deciding the level of R&D spending. The fifth is selecting the combination (portfolio) of applied and basic research projects. Whereas basic R&D advances science, applied R&D leads to new products and technologies. The sixth, and final, dimension is the venture's use of patenting to protect any competitive advantages it might gain from its R&D activities. This article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures. The biotechnology industry was chosen to test the study's hypotheses, using 112 ventures. Seven of the study's hypotheses focused on the potential variations in technology strategy between corporate and independent ventures. Independent ventures (IVs) were expected to surpass corporate ventures (CVs) in pioneering new products (technologies), using internal R&D, and emphasizing applied R&D. CVs were expected to surpass IVs in introducing new products, using external R&D sources, spending on R&D, and patenting. The study's remaining three hypotheses covered possible variations in new venture performance (NVP) and their sources. The results showed that IVs focused more on pioneering, pursued a more applied R&D portfolio, and emphasized internal R&D more than CVs. CVs utilized external technology sources, spent more heavily on R&D, stressed basic R&D, and used patenting more intensively than IVs. These results were consistent with the hypotheses. However, contrary to expectations, there were no significant differences between CVs and IVs in the frequency of new product introductions, probably because most ventures were at the invention, rather than the commercialization, stage. The results on the NVP of CVs and IVs were counter to expectations. IVs outperformed CVs, probably because of the high motivation of the IV owners who reaped the rewards of growth and profitability. Also, whereas CVs may have greater access to the resources of their sponsors, political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages. The results also indicated that CVs and IVs appeared to gain competitive advantages from different technological choices. Pioneering, a focus on applied R&D, and extensive use of the internal R&D sources were also positively associated with the performance of IVs. Heavy R&D spending, the use of both internal and external R&D sources, frequent product introductions, and patenting were positively associated with the performance of CVs. Finding that technology strategies significantly impacted NVP should encourage executives to consider pursuing a formal technology strategy. Likewise, the finding that different dimensions of technology strategy influenced the performance of CVs and IVs in different ways has practical implications. CV managers can learn from their higher performing IV rivals. Also, because established companies frequently acquire IVs, information about their technology strategies can be valuable in assimilating the acquired ventures. Overall, the results show that technology strategy is an important factor in enhancing new venture performance.

title: The impact of stocks and flows of organizational knowledge on firm performance: an empirical investigation of the biotechnology industry
abstract: The knowledge‐based view of the firm is a recent approach to understanding the relationship between firm capabilities and firm performance. Specifically, this approach suggests that knowledge generation, accumulation and application may be the source of superior performance. Other research has conceptualized organizational knowledge in terms of stocks of accumulated knowledge in the firm and flows of knowledge into the firm. This paper tests the relationship between stocks and flows of organizational knowledge and firm performance in the biotechnology industry. We suggest that a firm’s geographic location, alliances with other institutions and organizations and R&D expenditures are representative of knowledge flows, while products in the pipeline, firm citations and patents are indicative of knowledge stocks. Through factor analysis, we develop an aggregated measure of location from several variables. A regression model suggests that location is a significant predictor of firm performance as are products in the pipeline and firm citations. A major contribution of this investigation is the operationalization of geographic location and its statistically significant link to firm performance.

title: The Effect of a Market Orientation, Entrepreneurial Orientation, and Technological Capability on Innovativeness: A Study of Young Biotechnology Ventures in the United States and in Scandinavia
abstract: Previous research suggests that in order to excel in innovativeness, a firm should simultaneously be market oriented, proactive, and willing to take risks, as well as have access to superior technological assets and capabilities. However, the contribution of these factors on innovative outcomes has seldom been assessed in one study. This study investigates influences of market orientation, entrepreneurial orientation, and technological capabilities on technology ventures' innovativeness. Data for this study were collected through personal interviews in biotechnology startups in the United States, Finland, and Sweden. As expected, results indicate a significant link between technological capability and product innovativeness. However, neither market orientation nor entrepreneurial orientation is related to product innovativeness in this empirical context where firms typically aim at launching radical, disruptive innovations. The drivers of capital investments, however, are different from the antecedents of product innovativeness. Differences between the Nordic and U.S.‐based biotechnology ventures are also identified.

title: The impact of firmspecific capabilities on the amount of capital raised in an initial public offering: Evidence from the biotechnology industry
abstract: Going “public” has a magical sound to most entrepreneurial managers. By going public the firm increases its legitimacy in the business community, improves access to debt financing, and creates a means of exit for major shareholders. However, by far the most important reason for going public is to infuse a significant amount of investment capital into the firm. It is well documented that small businesses frequently fail because of insufficient funding and heavy debt loads. Issuing an initial public offering (IPO) allows entrepreneurial firms to overcome these pitfalls. Clearly, if access to capital is the major goal of going public, then the success of an offering is measured by the amount of capital raised by the firm. This study presents a model of the total amount of capital raised by a firm through an IPO. The explanatory variables include several indicators of the scientific capabilities of the firm including the location of the firm, the quality of the research staff, the number of products under development, the number of patents held by the firm, and the firm's prior spending on research and development (R&D). The model is empirically tested on a sample of 92 biotechnology IPOs. The results provide strong support for the hypothesized positive relationship between the total amount of capital raised by a firm's IPO and the scientific capabilities of the firm. Our results have important implications for entrepreneurs. First, an entrepreneur needs to develop and send credible signals indicating the value of the firm's intangible assets to the market. Second, the market values as deep a product pipeline as possible given a firm's resource constraints. Third, choice of location is a key strategic decision that should not be overlooked. Fourth, the market values firm-specific capabilities and will increase the capital it is willing to invest in a firm accordingly. Finally, the amount of capital a firm raises in its IPO can be influenced by entrepreneurial managers' strategic decisions.

title: Geographic cluster size and firm performance
abstract: This study clarifies the relationship betweengeographic cluster size and firm performance. Following a review of relevantliterature, several hypotheses are proposed. Data on 789 private and publicbiotechnology firms founded in the United States between 1973 and 1998 are usedto test the hypotheses. According to the data, economies of agglomeration(i.e., clusters) benefit firms in their ability to innovate through patentingand to attract alliance and private equity partners. At the same time, the marginal benefits of cluster size decline as clustersget large. This finding suggests that diseconomies of agglomeration may play animportant role when clusters exceed about 65 firms. The fact that firms aremore likely to fail as a cluster gets larger suggests that firms in largerclusters have different performance thresholds than firms in smaller clusters.(SAA)

title: The Role of Small Firms in U.S. Biotechnology Clusters
abstract: The biotechnology industry poses a particular challenge to analysis because its origins were poorly understood or even noticed at the time. The purpose of this paper is to examine and make sense of recent developments in the U.S. biotechnology industry. The pioneers and subsequent followers in biotechnology came from other fields. They altered their career trajectories in sciences like genetics and medical research to enter an unknown and undefined field, which only subsequently became labeled as biotechnology. Those regions exhibiting the greatest success in developing biotechnology clusters also possessed the greatest ability to unleash the potential commercialization latent in those scientists. To generate a successful regional cluster, the existence of world class scientific talent is a necessary condition. However, it is not a sufficient condition. The ancillary or complementary factors must also be available to translate this knowledge into a commercialized product. The complementary factors include the presence of venture capital and other forms of finance, the existence of an entrepreneurial culture, and transparent and minimal regulations fostering the start-up and growth processes.

title: The Competencies of Regions – Canada's Clusters in Biotechnology
abstract: Knowledge-intensive industries tend to concentrate geographically, because of the many spillovers that they generate. Thus new biotechnology firms often set up in regions that have innovative firms, government laboratories and universities, which attract them to enter. In this paper we unveil some of the characteristics of Canadian clusters in biotechnology: the key regions, their relative importance, and the main firms and government laboratories that attract new entrants. Moreover, we develop the concept of regions as nexus of competencies, a notion already put forward for firms, but that may be relevant to regions within nations and, ultimately, to nations as well. Capabilities of organizations and regions vary, and a thorough study of organizational and regional capabilities should precede the analysis of knowledge spillovers.Toronto is the main center of biotechnology in Canada, followed by Montreal, and Vancouver. The total population of the metropolitan area (a proxy for immediate market size and venture capital) explains the size, location and characteristics of most Canadian clusters. University research is also a key factor explaining the size of the biotechnology clusters, once population is held constant.Within nations, scientific and technical competencies vary strongly among regions. Some regions within countries concentrate a disproportionate share of the capabilities of all developed and developing nations. Moreover, regions tend to concentrate competencies on a few domains of expertise. This is what literature calls "agglomeration effects": companies active in the same field of technology tend to cluster geographically. They do so in order to share a common labor pool, and to obtain ready access to research institutions such as government laboratories and universities, or to key markets and customers, such as large assemblers or government facilities (Feldman et al., 1999). The specialized literature calls these institutions and key markets/customers "entry attractors" (Swan et al., 1998).In many types of science-based industries (SBIs), such as biotechnology, information technology and advanced materials, the major attractors are universities and government laboratories. In a few more mature SBIs, including aerospace and aircraft, large assemblers tend to naturally attract smaller producers of, components and specialized software.In this respect Canada is similar, to other nations (Niosi, 2000). Its competencies cluster around a few large and medium-sized urban agglomerations, such as Toronto, Montreal, Vancouver, Ottawa, Edmonton, and Calgary. Specialized clusters have also developed around smaller cities. This study builds a theory of the competencies of regions using biotechnology as a case study. Government laboratories, as well as universities and a few large firms, attract entry. The goal of the paper is to examine – using quantitative data – the relative competencies of regions in biotechnology, and the role of NRC laboratories and university research.

title: 'The tyranny of distance': Biotechnology networks and clusters in the antipodes
abstract: Regional governments around the world hope to become significant players in the world biotechnology industry through their support for local clusters. This article explores whether or not this is a realistic ambition. It does so through network analysis of biotechnology firms located in Melbourne, Australia, the leading biotechnology cluster in the Asia-Pacific. The article finds that the Melbourne cluster is characterized by both intensive regionalism and precocious internationalism, fuelled by 'the tyranny of distance' [Blainey, G., 1966. The Tyranny of Distance: How Distance Shaped Australia's History. Sun, Melbourne]. The regional ties are partial; the international ties are precarious. Support from venture capital and deals with big pharma are especially problematic. 'The tyranny of distance' is exacerbated by cultural dynamics, favouring ties with the US and UK rather than Japan and Korea, for example. In this context, making the cluster viable is an immense challenge, calling for imaginative and finely-directed public policy measures.

title: Does a clustered location matter for high-technology companies' performance? The case of biotechnology in the Netherlands
abstract: Young entrepreneurial companies in biotechnology tend to cluster in space, nearby research universities and research centers. This pattern is often ascribed to the availability of external economies, mainly local knowledge spillovers that help to reduce the uncertainty from a disruptive technology faced by these companies. Given a shortage of empirical research on cluster advantages and performance of clustered companies, we present results of a comparative analysis of clustered and non-clustered companies in biotechnology and Bionanotechnology in the Netherlands. It appears that, among other influences, a clustered location has no significant influence on innovation and speed of growth. However, a location in the largest cluster (Leiden) does contribute to a better performance in terms of innovativeness compared with all other locations. The kind of external economies involved seems to vary according to the stage in the knowledge value chain and the segment in biotechnology industry. Knowledge spillovers tend to be local for companies involved in new drugs and diagnostics research only in the first stage of the knowledge chain and for service companies regardless of the stage in the knowledge chain.

title: Performance differentials within geographic clusters
abstract: Increasing evidence indicates that firms benefit from a location in a geographic cluster of similar firms. The literature is nearly silent, however, on whether agglomeration economies accrue symmetrically across clustered firms. Drawing from the knowledge-based view, we investigate which firms benefit most from agglomeration and discuss how the implications for entrepreneurs are significant if some firms benefit more from geographic agglomeration than others. We investigate three particular firm attributes that may accentuate or mitigate benefits tied to participation in a cluster. We test our hypotheses on a sample of biotechnology firms and find strong evidence that firms benefit asymmetrically. Younger firms and firms with higher knowledge stocks benefit more from agglomeration.

title: Institutional Adaptiveness, Technology Policy, and the Diffusion of New Business Models: The Case of German Biotechnology
abstract: The German economy has been widely seen as failing to develop the commercial innovation competencies necessary to compete in new technologies. Starting in the mid-1990s, the German government instituted a series of new technology policies designed to orchestrate the development of small entrepreneurial technology firms. These policies have fostered several hundred new high-technology start-ups in Germany. This development represents an interesting challenge to prevailing institutional theory, which tends to view the characteristics of organizations as strongly constrained by the orientation of a number of key national institutional frameworks. Focusing on biotechnology, this article examines the relative importance of national institutional frameworks as opposed to sector-specific policies that are presently pervasive in Germany. Analysis of the new firms demonstrates that Germany's new technology policies have facilitated important extensions within the business system that have, for the first time, allowed the systematic promotion of entrepreneurial technology companies. However, the dominant strategies of market specialization and company organizational patterns found within these companies have been strongly influenced by incentives and constraints created by long-established national institutional structures. Technology policy has, however, promoted institutional adaptiveness by providing opportunities for firms to experiment with or reconfigure elements of relatively stable national institutional frameworks to create new business practices.

title: Development of SMEs and heterogeneity of trajectories: the case of biotechnology in France
abstract: Biotechnology is an emergent sector based on the creation of research-intensive Small and Medium Enterprises (SMEs). While some SMEs are growing, most of them remain small, even those set-up several years ago. What is the pattern of development of the biotech sector? What are the patterns of development of firms? Studies on the development of high-tech SMEs have focused on a business model, in which entrepreneurs rely on growth forecasts to persuade capital investors (business angels and venture capitalists) to invest in a radical innovation project. Firms aim for a world market to industrialise their innovation, and initial public offering (IPO) enables initial investors to make profits that offset risky initial investment. While this model is appealing, it is simply one of the possible models of biotechnology development. Some firms are not designed to experience exponential growth, and choose to target local markets. Moreover, not all firms have the ambition of being listed on the stock exchange. Based on an in-depth analysis of the business and development of 60 French biotech SMEs, this article identifies two business models. By defining the development trajectories of each of these models, it highlights the temporary nature of the emergent model.

title: Dynamics of Organizational Populations: Density, Legitimation, and Competition
abstract: This book seeks to deepen and broaden the understanding of change in organization populations by examining the dynamics of numbers of organizations in populations. The authors have studied various kinds of organizations, including national labour unions, newspapers and newspaper publishers, brewing firms, life insurance companies, and banks.

title: The conditioning effect of time on firm survival: An industry life cycle approach
abstract: In an effort to reconcile theoretical “blind spots,” we integrated research in technology management, organizational ecology, and evolutionary economics. The central premise underlying the resultan...

title: A Matter of Life and Death: Innovation and Firm Survival
abstract: This article examines the effects of innovation on survival using data on all manufacturing firms active in the Netherlands and the Community Innovation Survey. By estimating a parametric duration model, we show that firms benefit from an innovation premium that extends their life expectancy, independent of firm-specific traits such as age and size. Process innovation in particular seems to have a distinctive effect on survival. Furthermore, survival chances increase with the age and growth rate of a firm, the latter being more crucial than initial size. Finally, high intensity technology sectors are the most favorable to firm's survival.

title: An Introduction to Survival Analysis Using Stata
abstract: An Introduction to Survival Analysis Using Stata, Third Edition provides the foundation to understand various approaches for analyzing time-to-event data. It is not only a tutorial for learning survival analysis but also a valuable reference for using Stata to analyze survival data. Although the book assumes knowledge of statistical principles, simple probability, and basic Stata, it takes a practical, rather than mathematical, approach to the subject. This updated third edition highlights new features of Stata 11, including competing-risks analysis and the treatment of missing values via multiple imputation. Other additions include new diagnostic measures after Cox regression, Statas new treatment of categorical variables and interactions, and a new syntax for obtaining prediction and diagnostics after Cox regression. After reading this book, you will understand the formulas and gain intuition about how various survival analysis estimators work and what information they exploit. You will also acquire deeper, more comprehensive knowledge of the syntax, features, and underpinnings of Statas survival analysis routines.

title: Born to be alive? The survival of innovative and non-innovative French micro-start-ups
abstract: Based on French data describing the characteristics of entrepreneurs and their projects, this article studies the differences between the determinants of survival for innovative and non-innovative micro-enterprises. We show that the survival of innovative and non-innovative enterprises is linked to personal criteria such as age, gender, belonging to a minority, professional experience and financing sources. Our results also highlight the positive effect of not being alone in the start-up design phase, whereas being involved in a business network after the start-up period has no significant influence. The survival time of innovative enterprises, which is significantly lower than that of the non-innovative ones, seems adversely influenced by the entrepreneur’s previous management experience. Finally, when considering both innovative and non-innovative start-ups, there appears to be a type of “pecking order” as bank financing has a much more positive effect on survival than a personal one, although when focusing solely on innovative ones this difference does not exist.

title: Small business survival and sample selection bias
abstract: Analyses of small business and the factors affecting their survival are fairly common in the research literature. The level of research interest may stem from the fact that in the US, only about half of all new small businesses survive after 4 years (Headd 2003). However, research attempting to understand the phenomenon that employs data using only information from and about surviving firms may lead to erroneous conclusions regarding the factors that influence firm survival and failure. In this paper, we provide evidence that omitted information about the firms that disappear from the research data over time leads to biased coefficient estimates. Comparing the Heckman two-step estimation approach of switching regression models to a semi-parametric Cox hazard model, the Accelerated Failure Time (AFT) model, we conclude that the Cox ATF approach is the most appropriate model for firm survival analysis.

title: Special Issue: Frontiers of Organization Science, Part 1 of 2: Regional Industrial Identity: Cluster Configurations and Economic Development
abstract: We explore the concept of regional industrial identity as an important missing component in our understanding of the development of metropolitan regions and the spatial arrangements of industries. While economists and sociologists have explained the location of industry clusters on the basis of unevenly distributed resources, and historians have provided rich descriptive insight into the developmental dynamics of particular metropolitan regions, little systematic theory has been advanced to explain cross-regional inflows and outflows of resources, especially with respect to patterns in cluster development. This paper examines the concept of regional industrial identity as a social code that (1) arises from the shared understandings of residents and external audiences about the suitability of a region for particular kinds of business activity and (2) influences decisions about where to locate investments. We argue that such understandings are principally informed by configurations of industry clusters that have already formed in a region. Clusters, which are the results of historical investments, are also important signals about the types of business that can thrive in the future. We develop theoretical propositions linking characteristics of regional industry cluster configurations, in particular cluster dominance and cluster interrelatedness, to the strength and focus of regional identity and, as a result, to the types and amounts of resources that will develop within and flow into and out of regions.

title: Does innovativeness reduce startup survival rates
abstract: There are two competing hypotheses explaining how innovativeness influences the survival of startups: On the one hand, innovativeness is argued to foster survival-enhancing attributes (e.g., market power and cost efficiency) and capabilities (e.g., absorptive capacity). On the other hand, an innovative startup faces (and bears the associated risks of) liabilities of newness and smallness that exceed those of its non-innovative counterparts. The available empirical literature addressing this theoretical tension mostly supports the former hypothesis; we suggest that this finding is, in part, driven by the common practice of employing an ex post measure that already embodies a degree of success in innovativeness. We use an ex ante measure and find that a startup's innovativeness is negatively associated with its subsequent survival. We also find that entrepreneurs' greater appetite for risk magnifies this negative association. These findings imply that pursuing innovations is not necessarily associated with survival during the early stages of firm development and entails a more complicated start-up process.