Growth and Profitability in Small Privately Held Biotech Firms: Preliminary Findings

New Biotechnology, Vol. 25, No. 5, pp. 369-376, June 2009

UIC College of Business Administration Research Paper No. 09-11

21 Pages Posted: 31 May 2009

See all articles by Malin Brännback

Malin Brännback

Åbo Akademi University

Alan L. Carsrud

Florida International University (FIU)

Maija Renko

University of Illinois at Chicago

Ralf Östermark

School of Business and Economics - Åbo Akademi University

Jaana Aaltonen

Åbo Akademi University

Niklas Kiviluoto

Åbo Akademi University

Abstract

This paper reports on preliminary findings on a study of the relationship of growth and profitability among small privately held Finnish Life Science firms. Previous research results concerning growth and profitability are mixed, ranging from strongly positive to a negative relationship. The conventional wisdom states that growth is a prerequisite for profitability. Our results suggest that the reverse is the case. A high profitability-low growth biotech firm is more probably to make the transition to high profitability-high growth than a firm that starts off with low profitability and high growth.

Keywords: Biotechnology, profitability, growth, entrepreneurship

JEL Classification: M13

Suggested Citation

Brännback, Malin and Carsrud, Alan L. and Renko, Maija and Östermark, Ralf and Aaltonen, Jaana and Kiviluoto, Niklas, Growth and Profitability in Small Privately Held Biotech Firms: Preliminary Findings. New Biotechnology, Vol. 25, No. 5, pp. 369-376, June 2009 ; UIC College of Business Administration Research Paper No. 09-11. Available at SSRN: https://ssrn.com/abstract=1412424

Malin Brännback (Contact Author)

Åbo Akademi University ( email )

Piispankatu 16
Abo, Turku FIN-20500
Finland

Alan L. Carsrud

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Maija Renko

University of Illinois at Chicago ( email )

601 S. Morgan St. (M/C 243)
University Hall 2203
Chicago, IL 60607-7122
United States

HOME PAGE: http://business.uic.edu/faculty/maija-renko

Ralf Östermark

School of Business and Economics - Åbo Akademi University ( email )

Henriksgatan 7
Abo, Turku FIN-20500
Finland

Jaana Aaltonen

Åbo Akademi University ( email )

Piispankatu 16
Abo, Turku FIN-20500
Finland

Niklas Kiviluoto

Åbo Akademi University ( email )

Piispankatu 16
Abo, Turku FIN-20500
Finland

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