New Technology-based Firms Research Articles

Identifying and ranking the policies of the science and technology parks to support new technology-based firms

Due to the overwhelming complexity of the business environment, many new technology-based firms (NTBFs) face the risk of going out of business. Science and technology parks (STPs) as a keystone organisation in the innovation ecosystem have mission to support stabilisation and development of NTBFs. However, STPs have limited resources, it is necessary to identify the entire supportive requirements of these firms and to prioritise them. Next, the supporting actions can be initiated according to their priorities. In this research, 79 support requirements of NTBFs were identified and grouped into 14 main categories. To prioritise these 79 requirements, 18 chief executive officers of NTBFs (within the Paradise and Tehran University STPs) were surveyed. The surveys were analysed using fuzzy TOPSIS method to rank the requirements. In conclusion, it was indicated that supporting NTBFs in marketing and providing awareness of market changes are of higher priority compared to other supportive actions.

Strategic Decision-Making Speed in New Technology Based Firms

New Technology Based Firms (NTBF) operate in high-velocity environments that make considerable demands about the speed of strategic choices. This study draws upon strategic decision-making and organization theories to propose that strategic decision making speed mediates the relation between personal, organizational and environmental factors and performance. Hypotheses were theoretically developed and tested with data from an empirical investigation of Mexican NTBF. Measures of personal characteristics, organization structure, business environment, strategic decision speed and performance were collected from 103 Technology Founder Managers at the end of 2012. The results confirmed that strategic decision making speed influences the performance of NTBF and mediates the relation of uncertainty, CEO model, dynamism and hostility with firm performance.

The internationalisation of new technology-based firms from emerging markets

This paper offers an analysis of the factors influencing the accelerated internationalisation of new technology-based firms (NTBFs) from emerging economies. This type of firm is typically called 'born global', and they have been reported primarily in high-tech sectors. Existing international business (IB) theories have focused consistently on NTBFs from developed countries, however NTBFs from emerging markets remain under-studied. A survey was applied to small Brazilian NTBFs. The results indicate that NTBFs that have an entrepreneur, or a group of executives with international management skills, are more likely to have an accelerated internationalisation. In contrast to previous research in the field, the results demonstrate that NTBFs that take more than five years to enter the international market capitalise on their competence for innovation and abilities in international marketing, in the internationalisation process. Therefore, this research contributes new perspectives on studies on NTBFs from emerging markets.

R&D investment in new technology-based firms

This article examines how two core factors – strategic and entrepreneurial dynamics – influence research and development (R&D) investment in new technology-based firms (NTBFs) using data from a questionnaire survey conducted in Japan. Among the strategic dynamics, it is found that joint R&D projects with universities have a positive, complementary effect on R&D investment. Moreover, among the entrepreneurial dynamics, a chief executive officer’s higher education and prior industry experience in an R&D role (the latter implying at least a tertiary-level education in order to have acquired such experience) are positively related to R&D investment. These results indicate that the impact of universities on R&D expenditure in NTBFs occurs in strategic and entrepreneurial dynamics, and is expressed both directly and indirectly, with consequent implications for R&D capability and innovation.

Organisational capabilities and the long-term survival of new technology-based firms

PurposeThis study aims to analyse organisational capabilities among new technology-based firms (NTBFs) and examine how these capabilities are linked to the firms’ long-term survival.Design/methodology/approachThe study leverages a data set of 131 NTBFs located at 16 incubators in Sweden. The first part of the analysis seeks suitable organisational capabilities as determinants of firm survival. The second part is a statistical analysis. The organisational capabilities comprise six variables concerning business experience, financing and international markets.FindingsThe study comprises two data collections, with the first data collection being conducted in 2005, and the second in 2014. The survival rate for these firms was 55 per cent according to their respective annual reports in 2013. First, this study showed that the logistic regression model that included the three organisational capabilities is significant. Second, one variable is significant at the variable level: business experience. In addition, the control variable firm size is also significant.Originality/valueFurther empirical research in this area is required as the current research on organisational capabilities is quite limited and mainly conceptual in nature. Very few related studies focus on NTBFs and their survival. This study demonstrates a significant logistic regression model to determine links between organisational capabilities and firm survival.

New technology-based firms and their survival: The importance of business networks, and entrepreneurial business behaviour and competition

This longitudinal study identifies two core business dimensions important for New Technology-Based Firm (NTBF) survival. These business dimensions are business networks, and entrepreneurial business behaviour and competition. Data was collected from 131 small high-technology firms located in incubators initially in 2005, when most were almost three years old, and again in 2014. A factor analysis was conducted using 17 variables, and a correlation analysis was then performed. Four control variables were also included in the analysis to separate the performance that was due to the firm and the performance that was due to the incubators. Further, three latent variables were developed from the two business dimensions. The findings from this study confirm the importance of business networks and explain how the behaviour and competition of NTBFs during their initial three years may impact firm survival. The latent variables of business and patent advice also had a significant relationship with firm survival.

Characteristics of entrepreneurs and public support for NTBFs

This paper studies the role of the characteristics of entrepreneurs as determinants of public financial support for New Technology-Based Firms (NTBFs). Using a single database about the profile of Spanish technology entrepreneurs from 2001 to 2009, we analyze the relationship between NTBF participation in the NEOTEC program run by the main Spanish public agency for R&D and four dimensions of the entrepreneurial team: its human capital, its links to the public system of R&D, its motivation at the time the company was created and the extent of its planning to initiate the business activity. Our results show that NTBFs founded by entrepreneurs who have less experience in management, have planned less, are more oriented toward growth and have closer ties to the public system of R&D are more likely to participate in the public aid program.

The Investment Challenge of Financial Debt: Survival Dynamics of New Technology-Based Firms

The purpose of this study is to analyze the role of debt capital on the survival of new technology-based firms (NTBF) by shedding light on how financial debt has to be invested in order to increase...

Reasons for the Failure of New Technology-Based Firms: A Longitudinal Empirical Study for Germany

Insolvenzursachen in jungen High-Tech Unternehmen in Deutschland: Eine empirische longitudinale Studie In dem vorliegenden Artikel werden die Insolvenzursachen in jungen High-Tech Unternehmen in Deutschland in verschiedenen Finanzierungsphasen untersucht. Auf Basis einer umfassenden Literaturanalyse werden mögliche Insolvenzursachen für die einzelnen Finanzierungsphasen entwickelt. Mit Hilfe eines longitudinalen Datensatzes von 82 junge High-Tech Unternehmen wurde eine Untermenge dieser Insolvenzursachen empirisch getestet. Dabei konnten frühere Studien in Bezug auf die Technologie, den Markt, die Finanzierung und das Humankapital als wichtige Ursachenbereiche für das Scheitern von High-Tech Unternehmen bestätigt werden. Weiterhin lässt sich anhand der unterschiedlichen Signifikanzen und Vorzeichen der Korrelationen zeigen, dass sich die Insolvenzursachen in den jeweiligen Finanzierungsphasen unterscheiden. Die Variablen im Bereich Technologie sind in der frühen, ersten Finanzierungsphase nicht relevant, wohl aber in der zweiten. Während die marktbezogenen Variablen in allen Finanzierungphasen übereinstimmen, ändern sich die Vorzeichen in den Bereichen Finanzierung und Humankapital. Die longitudinale Analyse legt offen, dass sich die Insolvenzursachen in den einzelnen Finanzierungsphasen signifikant unterscheiden.

The participation of new technology-based firms in EU-funded R&D partnerships: The role of venture capital

This paper investigates the participation of new technology-based firms (NTBFs) in EU-funded R&D partnerships. We examine whether venture capital (VC)-backed firms are more likely to enter these partnerships than their non VC-backed peers and the role of the ownership and governance of the VC investor. We resort to a mixed method approach. We use qualitative information collected through interviews with managers of NTBFs and VC firms to better illustrate our deductively derived theoretical hypotheses, that are then tested through a large scale econometric analysis. The econometric analysis takes advantage of the VICO dataset, which includes longitudinal data on 8346 NTBFs from seven European countries observed from 1995 to 2008, out of which 758 were VC-backed. The econometric results show that VC backing has a strong positive impact on NTBFs’ participation in EU-funded R&D partnerships, but the magnitude of this effect rapidly decreases with NTBFs’ prior experience of this type of partnership. Moreover, the magnitude of the impact of VC backing considerably differs depending on the type of investor with bank and government VC exhibiting the strongest positive effects.

Managerial perceptions of barriers to internationalization: An examination of Brazil's new technology-based firms

What barriers constrain internationalization of new technology-based firms (NTBFs) in emerging markets? This study addresses the question by analyzing perceptions of barriers to internationalization expressed by top executives of Brazilian NTBFs. The NTBFs belong to high technology, medium–high technology, or technology-intensive service sectors. Analysis of data collected through questionnaire survey reveals three important barriers: external institutional barrier, and internal organizational capability barrier and human resource barrier. These barriers are consistent with the institutional theory, resource-based view of the firm, and human capital theory. Additionally, the study indicates that Brazilian NTBFs can be partitioned into three clusters with varying extents of perceptions of the above-mentioned barriers. The conclusion section discusses various contributions and limitations of the study and provides directions of future research.

Acquisitions of start-ups by incumbent businesses: A market selection process of “high-quality” entrants?

We analyze the frequency and nature by which new firms are acquired by established businesses. Acquisitions are often considered to reflect a technology transfer process and to also constitute one way in which a “symbiosis” between new technology-based firms (NTBFs) and established businesses is realized. Using a micro-level dataset for Sweden in which we follow new entrants up to 18 years after entry, we show that acquisitions of recent start-ups are rare and restricted to a small group of entrants with defining characteristics. Estimates from competing risks models show that acquired start-ups, in particular by multinational enterprises (MNEs), stand out from entrants that either remain independent or exit by being much more likely to be spin-offs operating in high-tech sectors, having strong technological competence, and having weak internal financial resources. Our overall findings support the argument that acquisitions primarily concern NTBFs in market contexts where entry costs are large, access to finance is important and incumbents have valuable complementary capabilities and resources.

The interplay between new technology based firms, strategic alliances and open innovation, within a regional systems of innovation context. The case of the biotechnology cluster in Belgium

New technology based firm (NTBF) survival and growth are connected with strategic partnering alliances and open innovation within technology clusters. Strategic partnerships in the biotechnology industry allow new technology based firms to gain a foothold in this high-cost, high-risk industry. In this article, we examine the impact of strategic partnerships and open innovation on the success of new biotechnology firms in Belgium by developing multiple case studies of firms in regional biotechnology clusters. A longitudinal follow up of the Belgian biotech startup ecosystem is presented. We find that, despite their small size and relative immaturity, new biotechnology firms are able to adopt innovative business models by providing R&D and services to larger firms and openly cooperating with them through open innovation. This is a theory-driven paper with suggested theoretical model and case study research design. Although the literature on strategic partnerships is well developed, the majority of studies focus on large, established firms. There is absence of studies that look at strategic partnerships – and specifically the role of open innovation – in the development of small and innovative biotechnology firms. This article addresses this gap in the literature with a focus on new firms in the biotechnology cluster in Belgium, where there is a growing trend towards technological and market-driven relationships between large and small biotechnology firms. Our conclusion is that the future of new biotechnology firms in Belgium lies in the effective establishment of strategic partnering alliances. In future research, the impacts of open innovation and novel business models warrant further attention.

The upgrade to hybrid incubators in China: a case study of Tuspark incubator

PurposeThis study aims to explore key factors and specific ways for the upgrade to hybrid incubators in the context of China. A hybrid incubator means that a technology-based business incubators (TBIs) can implement various distinct value creation processes with the integration of the advantages of non-for-profit and for-profit TBIs at same time as Chinese government now requires government-sponsored non-for-profit TBIs to be profitable self-sustainability with less dependent on direct public subsidies, aiming to motivate these TBIs to provide higher quality services for their tenant new technology-based firms (NTBFs).Design/methodology/approachThis study conducts a single in-depth case-study of Tuspark Incubator (located in Tsinghua Science Park [TSP]) with categorical analysis.FindingsThree factors, i.e. incubation subdivision, intermediary platform and proactive approach, are found to be essential for a formerly government-sponsored TBI’s upgrading. Incubation subdivision enables Tuspark Incubator to create multiple incubation processes with incubator characteristic variables of both non-for-profit and for-profit incubators; with the establishment of intermediary platform, Tuspark Incubator provides specialized business support and high-quality networking from relevant specialized service organizations external to the incubator; more proactive approach with equity investment on incubating firms from Tuspark Incubator help to generate social welfare and financial profit at the same time.Practical implicationsFor the incubators’ managers, incubation subdivision enables TBIs to operate for-profit and non-for-profit processes at the same time and provides different specific needs; more open intermediary service platforms can leverage the full potential of the actors in innovation system and help TBIs to save resource when upgrading to hybrid incubators; proactive approaches nurture learning climate and entrepreneurship environment to enhance the successful rate on NTBFs inside incubators and provide main profit source for incubators. For policy makers, using proactive approaches including creating a good milieu for incubation on technology-based start-ups and the design of public guidance funds is increasingly crucial.Originality/valueThis research is a pioneering study on the key factors and specific ways for the upgrade of government-sponsored non-for-profit TBIs in China to hybrid for-profit and non-for-profit incubators.

The effects of acquisition on the growth of new technology-based firms: Do different types of acquirers matter?

The growth of new technology-based firms (NTBFs) is usually restricted by their limited ownership and management structures. This paper explores whether acquisition, particularly that by multinational enterprises (MNEs), promotes the growth of NTBFs. Based on Swedish micro-level longitudinal data, this study further distinguishes between Swedish MNEs and foreign MNEs as acquirers and disentangles their different acquisition effects on the growth of NTBFs. Based on a large sample of Swedish NTBFs entering from 1997 to 2002 and being followed until 2009, this paper uses fixed-effects model combined with inverse-probability-of-treatment weights to account for endogeneity of acquisition arising from both time-invariant and time-varying heterogeneity across firms. The findings show that acquisition by Swedish MNEs significantly improves the growth of NTBFs, but only when it comes to the growth in employees. In contrast, acquisition by both foreign MNEs and Swedish domestic enterprises is not found to have any significant effects on the growth in either employees or sales of NTBFs.

Selective Subsidies, Entrepreneurial Founders' Human Capital, and Access to R&D Alliances

We investigate if and to what extent the receipt of a “selective” public subsidy - a public subsidy awarded through a competitive procedure - acts as a quality signal and helps new technology-based firms (NTBFs) to access RD and ii) access an R&D alliance with another firm or a public research organization (e.g. an university), once the subsidy is awarded. We estimate an Heckman-type probit model on a sample of 977 NTBFs. First, our results show that the receipt of a selective public subsidy increases the likelihood to access an R&D alliance. Second, founders’ technical education figures as a key determinant to get the first selective subsidy. Finally, founders’ previous industry-specific work experience allows an NTBF to “exploit the signal” of the selective subsidy, by positively moderating the impact of the subsidy on an NTBF’s likelihood to establish an R&D alliance. This moderating effect is economically relevant and statistically significant only when the alliance is established with a corporate partner.

Measuring efficiency and productivity growth of new technology-based firms in business incubators: the Portuguese case study of Madan Parque.

Business incubators can play a major role in helping to turn a business idea into a technology-based organization that is economically efficient. However, there is a shortage in the literature regarding the efficiency evaluation and productivity evolution of the new technology-based firms (NTBFs) in the incubation scope. This study develops a model based on the data envelopment analysis (DEA) methodology, which allows the incubated NTBFs to evaluate and improve the efficiency of their management. Moreover, the Malmquist index is used to examine productivity change. The index is decomposed into multiple components to give insights into the root sources of productivity change. The proposed model was applied in a case study with 13 NTBFs incubated. From that study, we conclude that inefficient firms invest excessively in research and development (R&D), and, on average, firms have a productivity growth in the period of study.

The new technology-based firm profile required for a delimitation of its definition in empirical studies

The main objective we pretend to reach is to obtain a conclusive final definition and the characterisation of new technology-based firm (NTBF). This quest for an integrative and commonly recognised profile gains even more force when focused on its application within the field of social and economic empirical studies. Within the social and economic empirical research, the formulation of the definition and full profile becomes highly relevant, because we cannot gather data without previous identifying and conceptualising the object of the research. That is, as the own proximity to the data access impregnates and clarifies the proper definition, at some NTBF studies. This paper debates existing approaches as well as defines the key factors needed to delimitate the definition and the parameters of the NTBF.

Integrating the supply and demand sides of public support to new technology-based firms

This paper analyses public support and argues that supply does not match demand in terms of the support needs of different types of new technology-based firms (NTBFs). The demand side of public support to NTBFs is analysed by developing a typology of NTBFs, based on venture origin and degree of innovativeness. Each types characteristics, challenges and support needs are identified. The supply side is analysed in terms of the goals, instruments and level of aggregation of the two main policy areas that provide support for NTBFs: small and medium-sized enterprise policy and science, technology and innovation policy. Finally, the demand and supply sides are compared and three main shortcomings of existing public support to NTBFs are identified. This paper makes a twofold contribution: first, the typology gives guidelines for policy-makers with respect to the support needs of the NTBFs. Second, it identifies shortcomings in existing public support and recommends improvements.

New technology-based firms in Europe: market penetration, public venture capital, and timing of investment

We investigate the effect of public (PUVC) and private (PRVC) venture capital funds on the sales growth of 6513 European New Technology-Based Firms (NTBFs) during the period from 1992 to 2009. Our results show that PUVC-backed NTBFs underperform with respect to PRVC-backed ones and do not grow more than non–venture capital-backed companies. The impact of PUVC is still not statistically significant (even though it is positive) when PUVC funds target young NTBFs. The only notable exception suggesting a positive and statistically significant impact for PUVCs is when PUVC funds cofinance with PRVC funds, and both target young firms