Completing the technology transfer process: M&As of science-based IPOs
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This paper investigates the valuation and merger and acquisition (M&A) dynamics of the population of 254 biotech firms that went public in Europe between 1990 and 2009. Among these, we identify a high proportion (40%) of firms affiliated with a university or another public research organization. After controlling for intellectual capital and other possible determinants, we find that affiliation with a university is recognized as beneficial by investors. This affiliation enhances the valuation of the firms and the probability of being targeted in subsequent M&As, particularly in cross-border deals. We conclude that following the initial public offering acquisitions by incumbent firms are mechanisms to finalize the technology transfer process started in a research institute. Our findings allow us to derive implications for venture investors, academic entrepreneurs, university managers, and policymakers.
KeywordsTechnology transfer Academic entrepreneurship University-firm relations IPOs M&As
JEL ClassificationsG34 M13 O32 L26
We have benefited from discussions with Massimo Colombo, Erik Lehmann, and Jay Ritter, and with colleagues at Bocconi University, University of Bergamo, and University of Padua, that lead us in particular to better develop the theoretical framework of the paper. We would also like to thank participants at the XX AiIG conference in Udine and at the Technology Transfer Society (T2S) conference in Greensboro.
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