The M&A dynamics of European science-based entrepreneurial firms
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This paper investigates the dynamics of a sample of 131 science-based entrepreneurial firms (SBEFs), selected out of 500 innovative small and medium enterprises (SMEs) that went public in Europe in the period 1995–2003. We found that the market for control of these firms was active, with most of our sample firms being acquired after their Initial Public Offering (IPO), usually by companies operating within the same industry. Floated SBEFs showed a higher propensity to be acquired than independent firms; this distinction persisted after controlling for intellectual capital and other possible determinants. While university affiliation enhanced attractiveness in the eyes of other companies, it negatively affected the propensity for acquisition. We argue that university-based firms do contribute to the technology transfer process, as evidenced by the widespread interest of the business world in investing in these firms. The creation of a SBEF is a first step in the process of commercial exploitation of university-research, while the subsequent step of going public is a sign of the success of this entrepreneurial venture. The take-over of SBEFs may be a final outcome of the process of knowledge diffusion.
KeywordsSBEFs University spin-offs Science-based entrepreneurship Europe IPOs M&As
JEL ClassificationG34 M13 O32
We would like to thank Petra Ahrweiler, Massimo Colombo, Alan Hughes, Katrin Hussinger, Philippe Mustar, Donald Siegel, Mike Wright, two anonymous referees, participants at the PRIME seminar in Sestri, at the IRIS workshop in Turin, and at the Academy of Management Conference in Anaheim. Financial support of the Italian Ministry of University and Research is gratefully acknowledged (FIRB project RBNE03ZLFW).
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