Sold, not bought: Market orientation and technology as drivers of acquisitions of private biotechnology ventures

Renko, Maija; Yli‐Renko, Helena; Denoo, Lien

doi:10.1016/j.jbusvent.2020.106022

Cited by 28 publications

(29 citation statements)

References 74 publications

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“…The following variables have been identified as potential drivers of acquisition probability: the size of the firm’s R&D activity and technical quality (Heeley et al , 2006; Ransbotham and Mitra, 2010), university affiliation (Bonardo et al , 2011; Cattaneo et al , 2015; Meoli et al , 2013), the amount and nature of financial resources (Andersson and Xiao, 2016; Cumming et al , 2019; Ragozzino and Blevins, 2016; Ransbotham and Mitra, 2010), the experience of investors (Clarysse et al , 2013), whether the firm is a public or private target (Shen and Reuer, 2005) and inter-organizational relationships (Bruneel et al , 2020; Bruyaka and Durand, 2012; Hoehn-Weiss and Karim, 2014; Reuer et al , 2012). Even more recently, the role of marketing behaviors in explaining acquisition probability has gained momentum (Bruneel et al , 2020; Cuypers et al , 2017; Renko et al , 2020).…”

Section: Introductionmentioning

confidence: 99%

“…Adding to the literature on technology acquisitions and the literature on categorization as well as entrepreneurial marketing, our contribution is threefold. First this paper adds to a recent but growing stream of research that investigates antecedents of acquisition success (Bruneel et al , 2020; Cotei and Farhat, 2018; Heeley et al , 2006; Ragozzino and Blevins, 2016; Ransbotham and Mitra, 2010; Renko et al , 2020; Shen and Reuer, 2005) by considering target-level antecedents of acquisition price, controlling for acquisition likelihood. We contribute to this stream of research in two important ways.…”

Section: Introductionmentioning

confidence: 99%

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Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

Bobelyn

Clarysse

Wright

2021

JRME

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Purpose This paper aims to study the effect of two important marketing decisions on the extent of value capturing by the firm owners. First, it addresses the debate whether acquirers of young technology-based firms value targets that span multiple technology and market categories indicating multiples options for growth or prefer more narrowly defined targets with a clear product and market focus. Second, it investigates to what extent the use of alliances for marketing purposes contributes to value capturing and how they moderate the effect of diversification of technology and marketing. Design/methodology/approach To estimate the acquisition price, a linear regression model is used, including a Heckman correction controlling for the likelihood of being acquired. The hypotheses are tested in a sample of British venture capital backed firms. Findings Firms that convey focus in their marketing activities (either because they focus on a few market categories or because they rely on downstream alliance to market their inventions) receive higher valuations at acquisition than those that diversify. Further, also the size of the product portfolio is negatively correlated to the acquisition price. Finally, the results reveal that firms with a broad patent portfolio can reduce the negative effects on firm value by engaging in less downstream alliances. Originality/value This paper advances existing research on exit strategies for entrepreneurial firms by considering factors explaining acquisition prices, instead of acquisition probabilities. Further, it adds the categorization research by demonstrating how acquirers respond to complex combinations of technology and market categories.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

Bobelyn

Clarysse

Wright

2021

JRME

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“…Patents are an important strategic resource and a legal safeguard to protect proprietary innovations (Renko et al, 2020). They are attractive assets for biotechnology companies because they defend themselves from unfair competition and provide the monopoly power over the usage and management of the creation (such as signing license agreements, sales, etc.).…”

mentioning

confidence: 99%

“…Besides, MO's influence on PERF was found to be fully mediated by AO. Thirdly, Renko et al (2020) investigated the role of market orientation on acquisitions. Their findings showed that a target's market orientation is an important direct driver of acquisitions and a substitutive interaction effect between market orientation and the new product development stage.…”

mentioning

confidence: 99%

Innovation performance of biotechnology firms in Bulgaria: opportunities for enhancing

Dimitrova

Yosifov

2021

MMI

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This paper deals with the investigation of the possibilities to improve the innovation performance in Bulgarian biotechnology firms. The main research purpose is to analyze Bulgaria's position concerning the innovative development of bio-based production. Methodological tools of the research methods were processing quantitative data, content analysis, and comparative situational analysis in combination with dynamic graphic analysis. The results of the research showed that there is a significant deficit in Bulgaria in the innovative development of biotechnology firms. The enhancement of the innovative biotechnological state of Bulgarian firms is a matter of great importance to their successful production and market performance on both the local and international markets. A small number of firms manage to find an adequate solution to creating stable market advantages and face insurmountable difficulties in trying to make it on the global market. Furthermore, Bulgaria's membership in the EU creates additional formal demands for providing a high quality of the production process, putting the local biotechnology firms in an even more challenging position. It suggests that companies need to focus their attention on producing goods with high added value (which is the basis of innovation) and applying and perfecting successful market-oriented approaches. In that relation, the arguments were summarized for the practical benefits of designing a complete model focused on biotechnology firms' market orientation, which is of crucial importance for their long-term innovative development. The study presents an author's conceptual model for measuring innovation performance of biotechnology firms which contains three constructs: market orientation, knowledge integration orientation, R&D effectiveness. The results from the conducted research could be helpful to research and practice R&D developers of firms with an established presence and long market history and upstart enterprises that cannot rely on income from their market activity, market or production experience.

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“…. The study of organizational path dependence has even reached topics such as entrepreneurship (e.g Wood, Bakker, & Fisher, 2020;Samuelsson, Söderblom, & McKelvie, 2020;Renko et al, 2020;Hallen, Davis, & Murray, 2020),. innovation (incl.…”

mentioning

confidence: 99%

Current Interest in the Theory of Organizational Path Dependence. A Short Update on the Occasion of the 2019 AMR Decade Award

Sydow

Schreyögg²,

Koch³

2020

SSRN Journal

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Sold, not bought: Market orientation and technology as drivers of acquisitions of private biotechnology ventures

Cited by 28 publications

References 74 publications

Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

Entrepreneurial exit by acquisition: the impact of heterogeneity in products and technology portfolio and marketing capabilities

Innovation performance of biotechnology firms in Bulgaria: opportunities for enhancing

Current Interest in the Theory of Organizational Path Dependence. A Short Update on the Occasion of the 2019 AMR Decade Award

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