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| Author: | Tahvanainen, A-J. Hermans, R. |
| Title: | Funding intellectual-capital-abundant technology development: empirical evidence from the Finnish biotechnology business |
| Journal: | Knowledge management research & practice
2005 : MAY, VOL 3:2, p. 69-86 |
| Index terms: | Intellectual capital Knowledge management Financial structure Bio-technology industry Small and medium-sized enterprises (SMEs) Nordic countries Finland |
| Freeterms: | SME |
| Language: | eng |
| Abstract: | This study takes an interdisciplinary approach to answering the questions of whether and how the intellectual capital (IC.) of a company is related to its financial structure. Factor and regression analyses are applied on a sample of 65 small and medium-sized Finnish biotechnology companies. Based on the results, it is found that firms with a well-balanced (here as: w-b.) IC. base finance their operations to a larger extent with retained earnings and debt, whereas companies with less w-b. IC. bases revert to other sources of financing, for example, external equity. Utilizing the conventional pecking order theory as a theoretical backdrop and recent results from its empirical research, two alternative rationales are presented behind deviating capital structure choices made by companies with dissimilar IC. bases. |
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