Intangibles and the Market Value of Biopharmaceutical Startups

Morales, Rosa and Radoniqi, Fatos (2017): Intangibles and the Market Value of Biopharmaceutical Startups. Forthcoming in: The Journal of Business Inquiry , Vol. 18, No. 2 (2018)

Abstract

his paper investigates the relationship between various measures of intangible capital and the market valuation of young biopharmaceutical firms. We employ a non-linear model to measure the impact of R&D, patents, alliances, organizational capital, and mergers on the value of 349 newly-incorporated firms between 1980 and 2006. We find that, with the exception of mergers, our measures of intangible capital havepositive and significant effects on market values; the impact of R&D declines as firms mature; and the omission of either alliances or organizational capital leads to a significant overstatement of the influence of R&D.

• Item Type: MPRA Paper
• Language: English
• Keywords: Innovation, R&D, Intangible Assets, Market Valuation, Biopharmaceuticals
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22 - Investment ; Capital ; Intangible Capital ; Capacity; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L65 - Chemicals ; Rubber ; Drugs ; Biotechnology; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D

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