scholarly journals External Financing, R&D Intensity, and Firm Value in Biotechnology Companies

2019 ◽  
Vol 11 (15) ◽  
pp. 4141 ◽  
Author(s):  
Namryoung Lee ◽  
Jaehong Lee
Keyword(s):  
Firm Value ◽  
Biotechnology Industry ◽  
Debt Financing ◽  
External Financing ◽  
Commercial Success ◽  
Financing Decisions ◽  
Biotechnology Firms ◽  
Debt Market ◽  
Biotechnology Companies ◽  
The Relationship

Focusing on biotechnology firms, this study analyzes the relationship between the level of intensity of the research and development (R&D) conducted by a firm, the debt financing decisions the firm makes, and the overall value of the firm. The data presented shows that, although most firms are unlikely to acquire financing from the debt market, the opposite is true for firms in the biotechnology industry. One reason for this divergence may be the belief among biotechnology firms that their future commercial success depends on their ability to develop new products, resulting in a strategy of intense R&D. Furthermore, an examination of firm values reveals that while most firm values are negatively correlated with leverage and R&D intensity, biotechnology firm values show no such correlation, implying that biotechnology firms prioritize sustainable commercial success no matter the source of financing.

scholarly journals Government R&D Subsidy and Additionality of Biotechnology Firms: The Case of the South Korean Biotechnology Industry

2019 ◽  
Vol 11 (6) ◽  
pp. 1583 ◽  
Author(s):  
Kwangsoo Shin ◽  
Minkyung Choy ◽  
Chul Lee ◽  
Gunno Park
Keyword(s):  
Financial Performance ◽  
Technological Innovation ◽  
Strategic Alliances ◽  
Biotechnology Industry ◽  
External Financing ◽  
Biotechnology Firms ◽  
South Korean ◽  
Biotechnology Companies ◽  
Start Ups ◽  
D Investment

Government research and development (R&D) subsidies are more important in countries that are latecomers to the biotechnology industry, where venture capital has not been developed, and the ratio of start-ups is high. Previous studies have mostly focused on the additionality of the input and output through government R&D subsidies, such as private R&D investment, technological innovation, and financial performance. In addition, some studies have focused on the behavioral additionality (the change in a firm’s behavior) of firms through government R&D subsidies. However, each study is fragmented and does not provide integrated results and implications. Therefore, this study comprehensively investigated the effects of government R&D subsidies on the multifaceted aspects of input, output, and behavioral additionality based on data from South Korean biotechnology companies. This study used the propensity score matching (PSM) method to prevent selection bias. The results showed that firms benefiting from government R&D subsidies had a markedly higher R&D investment in terms of input additionality, and they produced more technological innovation within a shorter period in terms of output additionality, though financial performance was not determined. Moreover, government R&D subsidies have accelerated strategic alliances and suppressed external financing (debt financing) in terms of behavioral additionality.

scholarly journals AN INVESTOR'S PERSPECTIVE ON INFECTIOUS DISEASES AND THEIR INFLUENCE ON MARKET BEHAVIOR

2013 ◽  
Vol 14 (Supplement_1) ◽  
pp. S112-S127 ◽  
Author(s):  
Yi-Hsien Wang ◽  
Fu-Ju Yang ◽  
Li-Je Chen
Keyword(s):  
Infectious Disease ◽  
Infectious Diseases ◽  
Abnormal Returns ◽  
Enterovirus 71 ◽  
Biotechnology Industry ◽  
Information Value ◽  
Operating Conditions ◽  
Biotechnology Companies ◽  
The Relationship ◽  
Major Infectious Disease

Recently, increasing number of infectious diseases has swept the world. The outbreak of a contagious disease not only affects the health and lives of people but also causes economic growth to stagnate. Business in the biotechnology industry is closely related to infectious diseases but what exactly is the information value of the outbreak of infectious disease on biotechnology? This study investigates how such outbreaks can affect the performance of biotechnology stocks. In the past 10 years, major statutory infectious diseases in Taiwan have included ENTEROVIRUS 71, DENGUE FEVER, SARS and H1N1. The empirical results indicate that there is a significant abnormal return on company shares in Taiwan's biotechnology industry because of statutory infectious epidemics. The relationship between the financial ratios of biotechnology companies and abnormal returns was analyzed as part of this research. The results show that the influence on R&D ratios, current ratios and assets are significant. Empirical findings reveal that the investors rationally measure operating conditions of the biotechnology companies during outbreaks of major infectious disease and adjust portfolio allocation accordingly.

scholarly journals Firm Value and External Financing Needs

2017 ◽  
Vol 9 (6) ◽  
pp. 69 ◽  
Author(s):  
Aykut Karakaya ◽  
Ayten Turan Kurtaran ◽  
Ahmet Kurtaran
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Firm Value ◽  
Manufacturing Industry ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Dynamic Panel Data ◽  
Growth Potential ◽  
External Financing ◽  
Debt Market

The purpose of this paper is to examine effects on firm value of external financing needs and BIST 100 index to firms listed in the index of Istanbul Stock Exchange manufacturing industry by the panel data analysis methods in the period of 2008-2012. As a result of dynamic panel data analysis, it has be found to increase value of firms by previous term value of firm, being the BIST 100 index, the external financing needs, the financial leverage ratio, firm size and profitability.  It was observed that manufacturing firms in Turkey are firms having growth potential, profitable at low rate, whereas financial risk of them is high.It has been found that firms benefit from shorts term debt market being lower borrowing cost and risk because long term debt market hasn’t developed in Turkey leads to positive relationship between external financing needs and firm value. Additionally, It is determined that value of firms included in the index is higher from without because firms are necessary providing certain conditions to take part in the BIST 100.

The financial ecosystem available to early-stage biotechnology firms and its misalignment with interests of these firms, of the biotechnology industry and with global disease burden

2013 ◽  
Vol 19 (2) ◽  
Author(s):  
Gergely Toth
Keyword(s):  
Pharmaceutical Industry ◽  
Disease Burden ◽  
Early Stage ◽  
Biotechnology Industry ◽  
Market System ◽  
Biotechnology Firms ◽  
Early State ◽  
Innovative Therapies ◽  
Biotechnology Companies ◽  
Global Disease Burden

The development and commercialization of new therapeutics have had immense impact on the quality and length of human life.  Nevertheless, the biotechnology and the pharmaceutical industry have evolved to be driven mostly by a profit oriented market system, in which distinct stakeholders interact with different motivations to make the development and commercialization of therapeutics a reality.  This study discusses the funding ecosystem available for early-stage biotechnology companies and its influence on the their strategic business objectives and on the biotechnology industry.  On the basis of this, distinct paradoxes in the funding ecosystem are uncovered, which suggest that the present ecosystem is not well aligned with the interests of these biotechnology firms, the biotechnology industry, and it neglects strategic disease burden needs. It is recommended that even partial resolution of these paradoxes will enable further growth in the industry and lead to more innovative therapies for untreatable diseases with large social and economic burdens.  In light of this, the study proposes improvements of financing approaches and an increase of available capital in the funding ecosystem of early-state biotechnology companies.

Governance structures, cash holdings and firm value on the Ghana Stock Exchange

2018 ◽  
Vol 18 (4) ◽  
pp. 671-685 ◽  
Author(s):  
Disraeli Asante-Darko ◽  
Bright Adu Bonsu ◽  
Samuel Famiyeh ◽  
Amoako Kwarteng ◽  
Yayra Goka
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Boards Of Directors ◽  
Stock Exchange ◽  
Cash Holdings ◽  
Debt Financing ◽  
Content Type ◽  
Governance Practices ◽  
Ghana Stock Exchange ◽  
The Relationship

Purpose There is an existing relationship among shareholders, boards of directors and management of companies. Corporate governance practices of companies are expected to ensure that this relationship maximises the wealth of shareholders. Differences exist among corporate governance of companies listed on the Ghana Stock Exchange. Companies, for purposes of liquidity, hold cash, but cash holdings also add to the cost of financing, according to working capital theories. The study, thus, sought to examine the relationship between corporate governance practices, ownership structure, cash holdings and firm value. Design/methodology/approach The study deployed the seemingly unrelated regression to reduce the problem of multicollinearity resulting from the strong relationship between cash reserves and some control variables. Findings The study found no significant relationship between board size and firm value. Similar findings were also made on the relationship between proportion of non-executive directors on the board and firm value. However, firms audited by the big four audit firms are valued higher by the capital market. Cash holdings of firms negatively affect performance, and this is statistically significant. A positive relationship arises between a firm’s cash holdings and its value as a result of debt financing, even though this is not significant. Originality/value The study is the first of its kind that deploys Tobin’s Q as a measure of firms’ value to reflect investors’ valuation of firms in Ghana. The study is also the first of its kind to test the interactive effect of debt financing and cash holdings on firm value in Ghana.

Market Orientation, Alliance Orientation, and Business Performance in the Biotechnology Industry

2014 ◽  
Vol 20 (2) ◽  
Author(s):  
Grant Alexander Wilson ◽  
Jason Perepelkin ◽  
David Di Zhang ◽  
Marc-Antoine Vachon
Keyword(s):  
Market Orientation ◽  
Business Performance ◽  
Biotechnology Industry ◽  
Performance Outcomes ◽  
Web Based ◽  
Alliance Orientation ◽  
Biotechnology Companies ◽  
Medical Healthcare ◽  
The Relationship ◽  
Sequential Relationship

The purpose of this study was to test the unexplored relationship between market orientation (MO), alliance orientation (AO), and business performance (PERF) in the medical/healthcare subsector of the Canadian biotechnology industry.  The study surveyed Canadian biotechnology executives via mail and web-based questionnaires.  It was found that the relationship between MO and PERF was positive and significant and the relationship between AO and PERF was positive and significant.  It was also found that the relationship between MO and AO was positive and significant, supporting the existence of a mediation relationship.  Specifically, MO’s influence on PERF was found to be fully mediated by AO.  This suggests that Canadian medical/healthcare biotechnology companies that were highly market-oriented were also highly alliance-oriented, and highly alliance-oriented companies were top performing companies.  This study outlines the apparent sequential relationship between market-oriented behavioural commitments, alliance-oriented activities, and business performance outcomes among Canadian biotechnology companies.  Furthermore, it has business development and the commercialization process implications for biotechnology managers.

Taxes, Financing Decisions, and Firm Value

CFA Digest ◽  
1999 ◽  
Vol 29 (1) ◽  
pp. 31-32
Author(s):  
Stephen E. Wilcox
Keyword(s):  
Firm Value ◽  
Financing Decisions

Debt Financing Decisions by European Firms

2011 ◽  
Author(s):  
Victoria Krivogorsky ◽  
Gun-Ho Joh
Keyword(s):  
Debt Financing ◽  
Financing Decisions
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