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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  

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

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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