New Technology-based Firms Research Articles

When do subsidies facilitate high-tech firms' access to venture capital An examination of cross-national and national grants

This study addresses the key question of how grant-based subsidies might serve differently as quality certificates for new technology-based firms (NTBFs) when trying to raise venture capital (VC). Therefore, we distinguish between cross-national, national, and sub-national subsidies. Based on the data of 1,568 German NTBFs, we apply a non-parametric matching procedure to control for the endogenous nature of subsidy reception. Our results show that cross-national grants have a strong certification effect, which reduces the information asymmetry between NTBFs and VC providers to the benefit of the new venture. Similarly, sub-national grants, awarded by regional government authorities, exhibit the same certification effect butless pronounced compared to cross-national grants. No significant effect can be observed for national subsidies.

EFFECTS OF INTERNAL AND EXTERNAL RESOURCE DIMENSIONS ON THE BUSINESS PERFORMANCE OF NEW TECHNOLOGY-BASED FIRMS

This study examines the effects of new technology-based firms (NTBFs) internal and external resources on their early business performance. Based on a large unique dataset of 401 newly started NTBFs, we find that founders’ business experience and their firms’ proximity to other firms positively affect early business performance. Growth orientation is found to be negatively related to business performance, which might suggest a certain level of over-optimism among entrepreneurs with aspiration to grow fast.

Innovation in R&D service firms: evidence from the UK

ABSTRACTResearch and Development (R&D) service firms make significant contributions to innovation in other businesses. The extant literature considers these firms a homogenous sub-group of Knowledge Intensive Business Service firms (KIBS). The objective of this study is to investigate how R&D service firms innovate and the variety of innovation practices within these firms. Employing data from semi-structured interviews with senior managers from 32 UK-based R&D service firms, we suggest that there are two different modes of innovation: in the first mode, R&D service firms innovate similarly to KIBS whose innovation is ad-hoc in nature and driven by customers’ requests; another group of R&D service firms innovate like New Technology-based Firms (NTBFs) relying more on structured in-house R&D activities.

Novelty-oriented value propositions for new technology-based firms: Impact of business networks and growth orientation

To perform, new technology-based firms (NTBFs) need to develop value for customers that distinguish them from others in the market. Therefore, the development of novelty-oriented value propositions are important, and may be influenced by several factors. We argue that the propensity to become more novelty-oriented can be influenced by an internal drive to grow (growth orientation) and by external contributions (business networks). Hence, the purpose of this paper is to analyse how business networks and growth orientation effects on the novelty orientation of NTBF value propositions. Based on survey data from 401 NTBFs founded between 2013 and 2015, in the nascent start-up phase novelty-oriented value propositions of NTBFs positively relate to informal (management) networks, as well as founders' attitudes towards growth. Thus, such networks and attitudes from founders should be supported in the very early phases of start-up if novelty orientation is to be preferred as a performance determinant.

Public research and the innovation performance of new technology based firms

Assessing the role of publicly funded scientific research in entrepreneurial ecosystems is of great interest for science and entrepreneurship policy. Knowledge from academic research flows into the private sector through publications, patents, and researcher mobility as well as through direct interactions between founders and researchers at public research institutions (PRIs). New technology-based firms (NTBFs) are generally praised for high innovativeness despite their resource constraints and liability of newness. This study therefore investigates the impact of direct interactions with PRIs on NTBFs’ innovation success. In a large sample of NTBFs in Germany, we find that those firms engaging in such knowledge interactions are more likely to introduce new products and services to the market. The strength of this association, however, depends on interaction persistency, internal R&D and the founders’ academic backgrounds. Non-academic start-ups benefit more from continuous informal interactions if they pursue own R&D, which suggests that absorptive capacity matters. In academic start-ups, higher intensities of both formal and informal interactions are associated with greater innovation likelihood. Moreover, continuous informal interactions complement formal ones in the absence of own R&D activity.

Funding new ventures: Balancing legitimacy building processes between financing audiences

New technology-based firms (NTBFs) often require large amounts of financial capital to develop their technology into viable business offerings. Due to liabilities of newness and asymmetric information, they often lack the legitimacy needed to be credible cases for investors. Hence, the building of legitimacy towards potential funding sources is a key issue in the NTBF development process. This paper empirically examines the process of legitimacy development during the first years of NTBFs' life. Based on longitudinal cases studies where six NTBFs are followed over a three-year period, we find that the legitimation process is indeed continuous, where legitimacy needs to be built, re-built, maintained and restored during the development process of the NTBF. Further, the findings supports previous assertions that the sources of legitimacy varies between different funding sources. As NTBFs usually do not approach different funding sources sequentially, they often need to manage their legitimacy with financing actors with different institutional logics at the same time. This represent a challenging balancing act in the legitimation process for 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” subsidy – a public subsidy awarded through a competitive procedure – helps new technology-based firms (NTBFs) to access R&D alliances. In particular, we theoretically enquire and empirically analyze which founding team-level characteristics allow NTBFs to: i) get a selective subsidy; and ii) access an R&D alliance with another firm or a public research organization/university, once the subsidy is awarded. We use a sample of 902 NTBFs that operate in Italy, where industrial policy has never had an explicit and exclusive mandate neither for targeting NTBFs nor for easing their access to R&D networks. By means of several identification strategies and estimation methods, our results point to the relevance of selective subsidies in facilitating NTBFs to enter R&D alliances, independently from the objective of the policy measure. Second, founders’ technical education figures as a key determinant to get the first selective subsidy. Finally, founders’ previous industry-specific work experience allows NTBFs to better exploit the selective subsidy, by positively moderating the impact of the subsidy on the likelihood to establish a corporate R&D alliance.

Business networks and localization effects for new Swedish technology-based firms\u2019 innovation performance

This study examines the business networks and localization effects for new technology-based firms (NTBFs) in the context of innovation performance (the number of patents and product differentiation). In this regard, the study includes 28 variables. A survey was conducted in 2016 with 401 Swedish NTBFs that were small and young (the employment mean was 1.80 and the average age of each firm was 28.3 months). The biggest category of NTBFs was knowledge-intensive high-technology services, followed by medium high-technology manufacturing, and high-technology manufacturing. Hypotheses on how business networks and localization are related to innovation performance were tested using principal component analysis, correlation analysis, and regression analysis. The results show that the primary significant factor for innovation performance regarding business networks and localization dimensions are professional network services, while industrial and regional areas also have a positive relationship on product differentiation. Our study also shows that innovation performance enhances firms’ abilities to access external financing through professional network services (e.g., venture capital companies).

Os Papéis dos Agentes de Suporte a Empresas de Base Tecnológica

Resumo O principal papel dos agentes de suporte à inovação (ASIs) é apoiar o desenvolvimento de empresas de base tecnológica (EBTs). Entre estes agentes destacam-se aceleradoras de empresas (AEs), incubadoras de empresas (IEs) e parques tecnológicos (PTecs). Ainda são recentes na literatura artigos que abordam estes três tipos de agentes em conjunto, o que indica que este é um tema que atualmente começa a se desenvolver, sendo, todavia, promissor em vista da importância econômica do desenvolvimento de EBTs e de ambientes de inovação. Com efeito, o objetivo deste artigo é analisar os papéis, os pontos comuns e as diferenças entre estes três tipos de ASIs, no que tange ao seu apoio ao desenvolvimento de EBTs. A abordagem utilizada é a qualitativa, em que foram obtidos dados de um total de vinte e três agentes, distribuídos entre AEs, IEs, PTecs e EBTs, localizados no Brasil, ou em Portugal. Como resultado, apresenta-se uma visão sistemática e abrangente destes três tipos de ASIs, baseada nos construtos: espaço físico e serviços básicos, gerencial, aculturação e redes de relações sociais. Adicionalmente, como implicação prática, conclui-se que este artigo pode ser utilizado como fonte de referência para o desenvolvimento, tanto de ASIs quanto de EBTs.

Science and technology park: Future challenges

Science and Technology Parks (STPs) originated in the 1950s in the US. Since then, a number of countries have implemented these types of parks to develop and revitalize regions, boost high-tech industry sectors, foster greater industry-academia interaction, support new technology-based firms (NTBFs), and encourage academic spin-offs. Although these parks have operated for many years, there is no universally accepted definition in the literature or consensus regarding the contributions of STPs to the region and tenant companies. Using the method proposed by Lage Junior and Godinho Filho (2010), this study analyses 56 articles, indicating their objectives and results and providing guidance on controversial topics, and identifies existing gaps, opportunities, and challenges for future studies. The results suggest that the multiple definitions of STPs make expectations about these parks very high. Much of the literature identifies positive contributions for both the region and tenant companies and the main impact is fostering greater interaction with universities.

Testing the Mediating Role of Open Innovation on the Relationship between Intellectual Property Rights and Organizational Performance: A Case of Science and Technology Park

The present study was conducted in Semnan Science and Technology Park and aimed to analyze the relationship among intellectual property rights, open innovation, and organizational performance of 30 New Technology Based Firms (NTBFs). Senior managers, middle managers, and business owners were considered as appropriate respondents for study. A total of 140 questionnaires were distributed among the respondents, and 126 filled questionnaires were returned. The research method used in this study is descriptive-correlation and the analysis was carried out utilizing Structural Equation Modeling. The factors analysis and the findings show that intellectual property rights have a significant positive relationship with open innovation. Further, open innovation has a significant positive relationship with organizational performance. Moreover, no significant relationship between intellectual property rights and organizational performance was established. But, intellectual property rights affect organizational performance positively, through open innovation acting as a mediator.

Venture capital for German high-tech new ventures: disentangling the role of human capital for funding success

This study examines the determinants of venture capital funding success in a German research context. Prior research has largely focused on the benefits of human capital, documenting the many advantages that arise out of the presence of certain capabilities and knowledge. However, countries differ with regard not only to available human capital but also to environments and the active involvement of investors. As a result, certain human capital resources might be more relevant or even compensated for. Therefore, this study investigates German new technology-based firms (NTBFs) and the role of human capital when trying to access external equity financing. We find that innovative human capital and the amount of general human capital positively affect the access to venture capital funding in Germany. Surprisingly, we find a negative correlation between the probability of accessing venture capital and the founders' number of years in the industry.

O papel dos agentes de suporte à inovação no desenvolvimento de empresas de base

O objetivo deste artigo e analisar o papel de agentes de suporte a inovacao (ASIs) no desenvolvimento de empresas nascentes de base tecnologica (ENBTs) a partir do conceito de assimetria de informacoes entre os agentes economicos. Para isso, foi utilizada a abordagem qualitativa de analise comparativa de multiplos casos em duas aceleradoras de empresas, duas incubadoras e dois parques tecnologicos. De acordo com os dados obtidos e sua posterior analise, foi verificado que os ASIs contribuem para as ENBTs da seguinte maneira: distribuindo informacoes do mercado, reduzindo, assim, seu custo de pesquisa; favorecendo a formacao de suas redes de relacoes sociais; emprestando sua reputacao; e reduzindo o custo de pesquisa de agentes de mercado no que tange o acesso as ENBTs. Nao obstante, esses papeis variam de acordo com a natureza do ASI investigado. De resto, esta pesquisa pode ser usada como referencia para ambos, ASIs e ENBTs, no que se refere ao desenvolvimento de aspectos informacionais e sociais desta ultima.

How marketing capabilities shape entrepreneurial firm\u2019s performance? Evidence from new technology based firms in turkey

Prior research has shown that early development of marketing capabilities enable firms to achieve competitive advantage. The entrepreneurial orientation of the firm acts as a catalyst and impacts the market orientation and the marketing capabilities of the firm in a positive way. A high level of entrepreneurial orientation enables the firms to be innovative, take calculated risks and be proactive in their marketing- related activities. The marketing activity of the firm becomes entrepreneurial. In this empirical study, we test the various antecedents and outcomes of marketing capabilities in entrepreneurial new technology- based firms (NTBFs) in a developing country’s environment. The study sample consists of 253 small and medium sized NTBFs operating in the METU Technopark, Turkey. The structural equation modelling approach using PLS was employed to test the research hypotheses. Results show that the early development of marketing capabilities of the NTBF significantly impacted performance, prompting implications for policy makers.

Absorptive capacity and the identification of opportunities in new technology-based firms

The purpose of this work is to investigate relationships between knowledge and opportunities in new ventures. More specifically, this work proposes and empirically tests how potential absorptive capacity is related with the identification of opportunities in new technology-based firms (NTBFs). To take into account the unique nature of NTBFs we divide potential absorptive capacity into problem absorptive capacity, i.e. the ability to identify and acquire knowledge of the goals, aspirations and needs of current and potential customers, and solution absorptive capacity, i.e. the ability to identify and acquire external knowledge of solutions to fulfill them. We develop three hypotheses, which predict that both problem absorptive capacity and solution absorptive capacity will be positively related with the identification of opportunities in NTBFs and that they will reinforce each other. The findings support the importance of making a distinction between the two proposed dimensions of potential absorptive capacity and shed light on their effectiveness and interaction for the identification of opportunities.

Linking relationship marketing to social embeddedness in a rural bilingual context

PurposeThe purpose of this paper is to explore the evolution of relationship marketing (RM) in a new technology-based firm (NTBF) and to illustrate how social embeddednesss benefits can be achieved by engaging in RM in a rural resource-constrained bilingual context.Design/methodology/approachA single in-depth case study of a NTBF operating in a rural bilingual context was explored over a five-year period. As part of the case study, participant observation was carried out and interviews with the novice entrepreneur, the firm’s employees and its customers were conducted.FindingsDeveloping mutually beneficial relationships with customers and key partners can enable a novice entrepreneur with no prior business ownership and limited marketing experience to accumulate and mobilise resources in order to achieve credibility and business growth. By analysing information from the NTBF’s entrepreneur, customers and other actors, the authors build theory and present propositions relating to the RM process.Practical implicationsThis case illustrates that RM can enhance the legitimacy of an inexperienced entrepreneur, and can enable a firm to address the liabilities of newness in a rural resource-constrained context. Entrepreneurs need to focus on relevant and specialised partnership and alliance relationships that can provide strategic resources for firm development. The bilingual influence has also been shown to aid the development of new relationships and thus ensuring social embeddedness.Originality/valueThe theoretical contribution of this study is to integrate insights from both RM and social embeddedness theories, and illustrate the extent to which a NTBF demonstrates social embeddedness benefits relating to customer retention and accumulation of strategic resources due to RM.

Origins and emergence of exploration and exploitation capabilities in new technology-based firms

The essence of new technology-based firms (NTBFs) is to generate new technologies and employ them in practice, contributing to a business sector in which many approaches to innovation have been exhausted. NTBFs are typically established around a founding team that possesses few resources but specific knowledge and a promising idea; NTBFs lack most of the advantages of incumbent organizations. To have a chance to succeed, these firms need to develop their organizational capabilities, particularly those for exploration and exploitation. Capabilities are fundamental building blocks of firms and key to organizational functioning. However, we have little understanding of how capabilities emerge within new organizations, including NTBFs. Therefore, we examine the origins of exploration and exploitation capabilities in NTBFs. A model of capability emergence is sourced from the literature, highlighting the role of routines for deliberate learning. A set of hypotheses concerning the antecedents and effects of routines for deliberate learning is tested, using a sample of 84 NTBFs and partial least squares structural equation modeling (PLS-SEM). This analysis offers empirical support for our model and hypotheses. Hence, the paper provides knowledge on the origins of NTBFs' exploration and exploitation capabilities and, in particular, the role of routines for deliberate learning in this regard.

Understanding Management Practices in Business Incubators: Empirical Evidence of the Factors Impacting the Incubation Process

Following the call for process-oriented research on business incubation processes, this paper investigates the process of business incubation (BI) via an understanding of management practices and interactions. Based on a comprehensive literature review and empirical evidence of management practices in business incubators ([Formula: see text]) dealing with new technology-based firms (NTBFs), we develop a conceptual model of factors having an impact on the incubation process of NTBFs, including propositions that can be tested in future research. Our results show that a combination of six management practices enables BI managers to accelerate the learning curve of entrepreneurs and the start-up process of their firms. Our results help to theorize about the factors having an impact on the incubation process of NTBFs and the dynamics behind the incubation process, and will enable BI managers to develop practices that really help entrepreneurs in the development of their NTBF.

Unravelling the effects of Science Parks on the innovation performance of NTBFs

In spite of the extensive presence of Science Parks in developed countries, it is still unclear whether they have been successful in fostering the innovation performance of new technology-based firms (NTBFs). The aim of this paper is to help answer exactly this question. Using an unbalanced panel of 7691 observations associated with 1933 Spanish NTBFs (2007–2013), located both on-park and off-park, our empirical results show no evidence of a direct relationship between being located on a Science Park and the innovation performance of the NTBFs. However, our findings reveal that Science Parks play a positive selection role by attracting NTBFs with high technological capabilities (indirect effect). Moreover, our results also indicate that the decision to locate in a Science Park may enhance the innovation performance of NTBFs that collaborate and jointly export (moderating effect). This paper provides new explanations that help provide a better understanding of the effects of Science Parks on innovation performance and also outlines several practical implications.

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.