Pub Date : 2012-04-02DOI: 10.5848/ilo.978-9-221257-45-5_16
I. Dror, A. Dalal, Michal Matul
Consumer education is often considered an integral part of microinsurance schemes; a win-win solution that benefits both microinsurance practitioners and their clients. It is supposed to help low-income households make sound choices and practitioners stimulate demand. The current lack of academic and business research, however, makes it difficult to prove whether consumer education can keep to its promise.We highlight key design features for content and delivery of the education and provide examples of organizations that have successfully implemented them, as well as review the challenges of sustainability and monitoring and evaluation that are especially relevant for practitioners who want to integrate education into their business models.
{"title":"Emerging Practices in Consumer Education on Risk Management and Insurance","authors":"I. Dror, A. Dalal, Michal Matul","doi":"10.5848/ilo.978-9-221257-45-5_16","DOIUrl":"https://doi.org/10.5848/ilo.978-9-221257-45-5_16","url":null,"abstract":"Consumer education is often considered an integral part of microinsurance schemes; a win-win solution that benefits both microinsurance practitioners and their clients. It is supposed to help low-income households make sound choices and practitioners stimulate demand. The current lack of academic and business research, however, makes it difficult to prove whether consumer education can keep to its promise.We highlight key design features for content and delivery of the education and provide examples of organizations that have successfully implemented them, as well as review the challenges of sustainability and monitoring and evaluation that are especially relevant for practitioners who want to integrate education into their business models.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124409719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We compare patenting motives of individual inventors, small firms, and universities to those of large firms. We use data from a survey (637 responses) among applicants at the European Patent Office. Our results from regression and factor analyses confirm significant differences among applicant types. The generation of licensing opportunities is rated as being more important if the applicant is a university, individual inventor or small firm. Blocking and prevention of imitation is rated as being less important if the applicant is a university. We interpret that this finding results from the universities’ willingness to license under adequate conditions and their tendency not to use their patents for preventing the diffusion of their technology and its usage by others. Individual inventors and small firms place a higher importance on using patents as signals to investors, suggesting that patents are perceived as useful to secure access to the capital necessary to start or grow a business. Among all applicant groups, individual inventors attribute the most importance to blocking as a patent filing motive. This gives cause for concern because individuals who do not manufacture products on their own but, rather, use their patents to block others from production act as patent trolls.
{"title":"Contributing to Markets for Technology? A Comparison of Patent Filing Motives of Individual Inventors, Small Companies and Universities","authors":"T. Veer, F. Jell","doi":"10.2139/ssrn.1932609","DOIUrl":"https://doi.org/10.2139/ssrn.1932609","url":null,"abstract":"We compare patenting motives of individual inventors, small firms, and universities to those of large firms. We use data from a survey (637 responses) among applicants at the European Patent Office. Our results from regression and factor analyses confirm significant differences among applicant types. The generation of licensing opportunities is rated as being more important if the applicant is a university, individual inventor or small firm. Blocking and prevention of imitation is rated as being less important if the applicant is a university. We interpret that this finding results from the universities’ willingness to license under adequate conditions and their tendency not to use their patents for preventing the diffusion of their technology and its usage by others. Individual inventors and small firms place a higher importance on using patents as signals to investors, suggesting that patents are perceived as useful to secure access to the capital necessary to start or grow a business. Among all applicant groups, individual inventors attribute the most importance to blocking as a patent filing motive. This gives cause for concern because individuals who do not manufacture products on their own but, rather, use their patents to block others from production act as patent trolls.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126843954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Innovation is associated to high cost and high level of risk. Many firms cannot finance this activity with internal financial resources. They need outside investors to finance their innovative projects. Venture capitalist funding seems to be an appropriate alternative especially when the firm is young. In this paper we study the relationship between a firm's innovation activity and venture capital. We have used different databases on innovative activity and venture capital financing in France's manufacturing sector for the period 1993-2006. First we examine the effect of venture capital financing on innovation, and second the impact of firms' innovation on venture capitalists' behaviour towards these firms. Our results show that the presence of venture capitalists enhances the innovation intensity of a firm. Furthermore we find that SMEs profit more from VC contribution than biggest one.
{"title":"Venture Capital and the Financing of Innovation","authors":"Donia Trabelsi, G. Shiri","doi":"10.2139/ssrn.1836800","DOIUrl":"https://doi.org/10.2139/ssrn.1836800","url":null,"abstract":"Innovation is associated to high cost and high level of risk. Many firms cannot finance this activity with internal financial resources. They need outside investors to finance their innovative projects. Venture capitalist funding seems to be an appropriate alternative especially when the firm is young. In this paper we study the relationship between a firm's innovation activity and venture capital. We have used different databases on innovative activity and venture capital financing in France's manufacturing sector for the period 1993-2006. First we examine the effect of venture capital financing on innovation, and second the impact of firms' innovation on venture capitalists' behaviour towards these firms. Our results show that the presence of venture capitalists enhances the innovation intensity of a firm. Furthermore we find that SMEs profit more from VC contribution than biggest one.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"117 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117275384","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In his book, 'Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do about It,' Harvard Business School Professor, Josh Lerner, explains that governments can only play a limited role in spurring innovation and entrepreneurship. Government initiatives are usually characterized by poor design and a lack of understanding for the venture capital process. He argues that governments better limit their role as catalysts by: (1) ensuring that the economic environment is conducive to entrepreneurial activity; and (2) providing direct investments. In this paper, we investigate the recent examples of governments that have followed either one of these suggestions. Relying on standard measures of success, we find that the participation of multinationals plays a crucial role in realizing the success of these initiatives. In the aftermath of the financial crisis, there is a world-wide revival of corporate venturing activities. We can now see that, insofar as it operates through corporate venture capital investments, the venture capital market is getting its magic back - and that when corporations participate in the process, it gives both strategic and financial benefits to the parties involved, such as governments, traditional venture capitalists, and entrepreneurs. The paper shows a shift in the fundamental nature of corporate venture capital and provides an account of the governance structures and contractual characteristics that encourage successful alliances between corporations and venture capital funds and their portfolio companies.
哈佛商学院(Harvard Business School)教授乔希•勒纳(Josh Lerner)在他的书《破碎的梦想大道:为什么公众推动创业和风险投资的努力失败了——以及如何应对》中解释说，政府在刺激创新和创业方面只能发挥有限的作用。政府倡议的特点通常是设计不良和对风险资本过程缺乏了解。他认为，政府最好通过以下方式限制其作为催化剂的作用:(1)确保经济环境有利于创业活动;(2)提供直接投资。在本文中，我们调查了最近政府遵循这些建议之一的例子。根据成功的标准衡量标准，我们发现跨国公司的参与在实现这些举措的成功方面起着至关重要的作用。金融危机过后，全球范围内企业风险投资活动复苏。我们现在可以看到，只要它通过企业风险资本投资运作，风险资本市场正在恢复其魔力——当企业参与这一过程时，它会给相关各方(如政府、传统风险资本家和企业家)带来战略和财务上的利益。本文展示了企业风险投资基本性质的转变，并提供了鼓励企业与风险投资基金及其投资组合公司之间成功联盟的治理结构和契约特征的说明。
{"title":"Venture Capital Beyond the Financial Crisis: How Corporate Venturing Boosts New Entrepreneurial Clusters (and Assists Governments in Their Innovation Efforts)","authors":"J. McCahery, E. Vermeulen","doi":"10.2139/ssrn.1617585","DOIUrl":"https://doi.org/10.2139/ssrn.1617585","url":null,"abstract":"In his book, 'Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed - and What to Do about It,' Harvard Business School Professor, Josh Lerner, explains that governments can only play a limited role in spurring innovation and entrepreneurship. Government initiatives are usually characterized by poor design and a lack of understanding for the venture capital process. He argues that governments better limit their role as catalysts by: (1) ensuring that the economic environment is conducive to entrepreneurial activity; and (2) providing direct investments. In this paper, we investigate the recent examples of governments that have followed either one of these suggestions. Relying on standard measures of success, we find that the participation of multinationals plays a crucial role in realizing the success of these initiatives. In the aftermath of the financial crisis, there is a world-wide revival of corporate venturing activities. We can now see that, insofar as it operates through corporate venture capital investments, the venture capital market is getting its magic back - and that when corporations participate in the process, it gives both strategic and financial benefits to the parties involved, such as governments, traditional venture capitalists, and entrepreneurs. The paper shows a shift in the fundamental nature of corporate venture capital and provides an account of the governance structures and contractual characteristics that encourage successful alliances between corporations and venture capital funds and their portfolio companies.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-05-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130881281","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
As of the mid 90's Israeli high-tech firms were no longer established to become a multi-national corporation, but “to be sold-out to foreign multinationals as quickly as possible." Impressive have been the prices that foreign firms have been willing to pay to acquire Israeli start-ups; a landmark “Sellout” that generated wide media coverage was the acquisition of Mirabilis, inventor of the popular chat program ICQ, by AOL in 1998 for $287 Million. Nevertheless, “High-Tech Sellouts” had negative ramifications for Israel. As more of the money behind Israeli projects came from the United States, some feared that the country's high-tech industry is losing its unique traits and become “Americanized." The title of this commentary goes after a 2000-headline, “Tax Engineers; While We Worry About Israeli Technology Leaving by the Front Door, Taxable Dollars are Flying Out the Window. So, What's the Point of a Tax Reform,” a report that displayed the frustration of the Israeli public with the phenomena of Israeli technology startups moving out of Israel, the loss of revenues on “High-Tech Sellouts." This list studies the phenomena of “high-tech emigration” and “High-Tech Sellouts,” with special attention to the Rabinovitch Report, and the 2005-“Mini” Tax Reform. In this list, I challenge the conventional wisdom in Israel that faulty fiscal regularity is the only and chief reason that drove the high-tech sector out of Israel. I will demonstrate this claim by examining the Rabinovitch Tax Reform and the 2005 "Mini Tax Reform" and its impact technology startups, entrepreneurs and foreign investors.
{"title":"Israel 1998-2002: 'Israeli Technology Leaving by the Front Door', 'Taxable Dollars are Flying Out the Window' Can Israel Tax 'High-Tech Sellouts' Post-2003 & The Rabinovitch Tax Reform‘","authors":"Dr. Shlomo Katalan","doi":"10.2139/SSRN.1549368","DOIUrl":"https://doi.org/10.2139/SSRN.1549368","url":null,"abstract":"As of the mid 90's Israeli high-tech firms were no longer established to become a multi-national corporation, but “to be sold-out to foreign multinationals as quickly as possible.\" Impressive have been the prices that foreign firms have been willing to pay to acquire Israeli start-ups; a landmark “Sellout” that generated wide media coverage was the acquisition of Mirabilis, inventor of the popular chat program ICQ, by AOL in 1998 for $287 Million. Nevertheless, “High-Tech Sellouts” had negative ramifications for Israel. As more of the money behind Israeli projects came from the United States, some feared that the country's high-tech industry is losing its unique traits and become “Americanized.\" The title of this commentary goes after a 2000-headline, “Tax Engineers; While We Worry About Israeli Technology Leaving by the Front Door, Taxable Dollars are Flying Out the Window. So, What's the Point of a Tax Reform,” a report that displayed the frustration of the Israeli public with the phenomena of Israeli technology startups moving out of Israel, the loss of revenues on “High-Tech Sellouts.\" This list studies the phenomena of “high-tech emigration” and “High-Tech Sellouts,” with special attention to the Rabinovitch Report, and the 2005-“Mini” Tax Reform. In this list, I challenge the conventional wisdom in Israel that faulty fiscal regularity is the only and chief reason that drove the high-tech sector out of Israel. I will demonstrate this claim by examining the Rabinovitch Tax Reform and the 2005 \"Mini Tax Reform\" and its impact technology startups, entrepreneurs and foreign investors.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"207 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-02-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132033986","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
With the search for next generation drugs getting harder, longer, and more expensive, pharmaceutical companies are scrambling to develop a broader suite of relevant capabilities (e.g. specific disease areas, high throughput drug screening, payor management, etc.). For example, biotech companies appear to have advantaged capabilities around development success rates - a more productive discovery capability focused on basic sciences and biology. In Bio-Pharma integrations, Pharma commercial capabilities are married with Biotech small molecule discovery, development, and licensing capabilities. Relevant scale can be increased in both development and marketing by leveraging across multiple therapeutic areas and geographies, as well as across both chemical and small molecule mechanisms. Integration must be shaped around the deal’s strategic intent to deliver on the strategic agenda. Merger integration has traditionally been more about merging positional assets than building capabilities, and tended to focus on footprint, headcount and cost reductions. Yet, BioPharma integrations are more about capability-building.
{"title":"Capability-Driven PMI: Realizing the Promise of BioPharma","authors":"G. Adolph, Bob Hutchens, J. Pettit","doi":"10.2139/ssrn.1479889","DOIUrl":"https://doi.org/10.2139/ssrn.1479889","url":null,"abstract":"With the search for next generation drugs getting harder, longer, and more expensive, pharmaceutical companies are scrambling to develop a broader suite of relevant capabilities (e.g. specific disease areas, high throughput drug screening, payor management, etc.). For example, biotech companies appear to have advantaged capabilities around development success rates - a more productive discovery capability focused on basic sciences and biology. In Bio-Pharma integrations, Pharma commercial capabilities are married with Biotech small molecule discovery, development, and licensing capabilities. Relevant scale can be increased in both development and marketing by leveraging across multiple therapeutic areas and geographies, as well as across both chemical and small molecule mechanisms. Integration must be shaped around the deal’s strategic intent to deliver on the strategic agenda. Merger integration has traditionally been more about merging positional assets than building capabilities, and tended to focus on footprint, headcount and cost reductions. Yet, BioPharma integrations are more about capability-building.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-09-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114443287","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Venture capital (VC) is concerned with seed, startup, and early stage investing in firms involved with innovative products or processes. Existing variance studies of VC provide an incomplete understanding of VC emergence, emphasizing either macro-level enabling conditions or the efficient fund-level operation of the VC cycle. Following Tsoukas and Chia (2002), our study focuses on the non-prototypical portion of the VC phenomenon, which is found in weak institutional environments characteristic of many developing countries. In these contexts, VC is more likely to be an unstable organizational form and hence subject to change. As a consequence, new VC forms and emergence processes may arise in these environments, providing data in support of a more complete, processual model of VC emergence. This paper reports findings of an exploratory case study of the VC emergence process in Botswana. Our main contribution is to develop a multi-stage process model of VC emergence. Our model consists of four processes: simultaneity (enabling), coproducing (bonding), diffusing, and replicating via the VC cycle. This model suggests that the establishment of appropriate simultaneity conditions - capital, entrepreneurs and specialized financial institutions - enables the diffusion of VC models and related institutions from other populations. In the presence of an equity gap, government investors and private fund managers need to then cooperate to fill the equity gap, creating the signal necessary for replication of VC funds through the operation of the VC cycle. We also contribute to the VC literature by showing that the diffusion of VC models and related institutions from other populations plays an intermediate role in the emergence process, following the establishment of simultaneity conditions, paralleling coproduction between government investors and fund managers, and preceding the operation of the VC cycle. The resulting model provides a more complete understanding of the VC emergence process and augments existing theoretical perspectives by emphasizing emergence as a dynamic change process. Our model should dampen policymaker enthusiasm for VC as a 'silver bullet' in the entrepreneurship development process, suggests the importance of sequencing in the design of government programs supporting VC development, calls attention to the limits of engineering coproduction in stimulating VC emergence in emerging markets contexts, and highlights the importance of an economy’s status as a limited access order in facilitating VC emergence. Fund managers and high-potential entrepreneurs can play a vital role in facilitating VC emergence through more careful pre-planning and the establishment of innovation associations.
{"title":"Toward a Process Model of Venture Capital Emergence: The Case of Botswana","authors":"E. Gilbert, D. Lingelbach","doi":"10.2139/ssrn.1459183","DOIUrl":"https://doi.org/10.2139/ssrn.1459183","url":null,"abstract":"Venture capital (VC) is concerned with seed, startup, and early stage investing in firms involved with innovative products or processes. Existing variance studies of VC provide an incomplete understanding of VC emergence, emphasizing either macro-level enabling conditions or the efficient fund-level operation of the VC cycle. Following Tsoukas and Chia (2002), our study focuses on the non-prototypical portion of the VC phenomenon, which is found in weak institutional environments characteristic of many developing countries. In these contexts, VC is more likely to be an unstable organizational form and hence subject to change. As a consequence, new VC forms and emergence processes may arise in these environments, providing data in support of a more complete, processual model of VC emergence. This paper reports findings of an exploratory case study of the VC emergence process in Botswana. Our main contribution is to develop a multi-stage process model of VC emergence. Our model consists of four processes: simultaneity (enabling), coproducing (bonding), diffusing, and replicating via the VC cycle. This model suggests that the establishment of appropriate simultaneity conditions - capital, entrepreneurs and specialized financial institutions - enables the diffusion of VC models and related institutions from other populations. In the presence of an equity gap, government investors and private fund managers need to then cooperate to fill the equity gap, creating the signal necessary for replication of VC funds through the operation of the VC cycle. We also contribute to the VC literature by showing that the diffusion of VC models and related institutions from other populations plays an intermediate role in the emergence process, following the establishment of simultaneity conditions, paralleling coproduction between government investors and fund managers, and preceding the operation of the VC cycle. The resulting model provides a more complete understanding of the VC emergence process and augments existing theoretical perspectives by emphasizing emergence as a dynamic change process. Our model should dampen policymaker enthusiasm for VC as a 'silver bullet' in the entrepreneurship development process, suggests the importance of sequencing in the design of government programs supporting VC development, calls attention to the limits of engineering coproduction in stimulating VC emergence in emerging markets contexts, and highlights the importance of an economy’s status as a limited access order in facilitating VC emergence. Fund managers and high-potential entrepreneurs can play a vital role in facilitating VC emergence through more careful pre-planning and the establishment of innovation associations.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116539864","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Legislative efforts to establish an abbreviated regulatory approval pathway for follow-on biologics (FOBs), also referred to as biosimilars, have generated considerable attention and debate. Legislators expect FOBs to produce cost savings through competition, much like that seen in the U.S. generic pharmaceutical market. However, biologic products, which are large complex molecules, differ from pharmaceuticals in many ways, including their basic structure, composition, and their manufacturing processes. The economics behind the establishment of an FOB market involves a plethora of issues not encountered in the generic pharmaceutical marketplace. One of the most critical and controversial issues is the determination of an appropriate period of data exclusivity or data protection for a new biologic. Building on recent research by Grabowski (2008) and using contemporary models of risk and return from the finance literature, we determine that 17 years of data exclusivity for new biologics are required. In this paper, we review some of the basic economic differences between pharmaceuticals and biologics; the potential for short run cost savings from a FOB market; and the challenging patent issues biologic products encounter that make data exclusivity periods so critical. However, the main thrust of our paper is that the considerable financial risk of biotechnology R&D, and the sensitivity of R&D to expected returns, makes it critical that Congress provide adequate incentives for biotech R&D through appropriate periods of data exclusivity or data protection for biologics.
{"title":"Exploration of Potential Economics of Follow-On Biologics and Implications for Data Exclusivity Periods for Biologics","authors":"J. Vernon, A. Bennett, J. Golec","doi":"10.2139/ssrn.1399784","DOIUrl":"https://doi.org/10.2139/ssrn.1399784","url":null,"abstract":"Legislative efforts to establish an abbreviated regulatory approval pathway for follow-on biologics (FOBs), also referred to as biosimilars, have generated considerable attention and debate. Legislators expect FOBs to produce cost savings through competition, much like that seen in the U.S. generic pharmaceutical market. However, biologic products, which are large complex molecules, differ from pharmaceuticals in many ways, including their basic structure, composition, and their manufacturing processes. The economics behind the establishment of an FOB market involves a plethora of issues not encountered in the generic pharmaceutical marketplace. One of the most critical and controversial issues is the determination of an appropriate period of data exclusivity or data protection for a new biologic. Building on recent research by Grabowski (2008) and using contemporary models of risk and return from the finance literature, we determine that 17 years of data exclusivity for new biologics are required. In this paper, we review some of the basic economic differences between pharmaceuticals and biologics; the potential for short run cost savings from a FOB market; and the challenging patent issues biologic products encounter that make data exclusivity periods so critical. However, the main thrust of our paper is that the considerable financial risk of biotechnology R&D, and the sensitivity of R&D to expected returns, makes it critical that Congress provide adequate incentives for biotech R&D through appropriate periods of data exclusivity or data protection for biologics.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-05-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125206394","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyses the development of venture capital financing in the US covering a time period from the beginning of 1995 until 2008 (third quarter). Its focus is the structural changes emerging from reallocation of financial resources over time with special emphasis on regional allocation based on quarterly data collected by the National Venture Capital Association (NVCA) and Price WaterhouseCoopers as the MoneyTree dataset. Taking into account the multiple dimensions offered by stages of venture financing cycle, direction of industries, and regional allocation together with the overall business cycle patterns one key finding is a fairly steady concentration process of US venture capital financing in two key destinations as the Silicon Valley and New England. This trend even prevails with a significant shift from ICT related research industry areas towards biotechnology, health and energy over the respective time period. Furthermore after the burst of the new economy bubble in particular start-up/seed early stage financing lost in importance measured by their respective shares in favour of financing for expansion and later stage financing. This indicates an increasing risk averseness in venture capital financing which might be attributed to the high degree of uncertainty of early stages.
{"title":"Regional Patterns of Venture Capital Financing in the US","authors":"G. Erber","doi":"10.2139/SSRN.1338633","DOIUrl":"https://doi.org/10.2139/SSRN.1338633","url":null,"abstract":"This paper analyses the development of venture capital financing in the US covering a time period from the beginning of 1995 until 2008 (third quarter). Its focus is the structural changes emerging from reallocation of financial resources over time with special emphasis on regional allocation based on quarterly data collected by the National Venture Capital Association (NVCA) and Price WaterhouseCoopers as the MoneyTree dataset. Taking into account the multiple dimensions offered by stages of venture financing cycle, direction of industries, and regional allocation together with the overall business cycle patterns one key finding is a fairly steady concentration process of US venture capital financing in two key destinations as the Silicon Valley and New England. This trend even prevails with a significant shift from ICT related research industry areas towards biotechnology, health and energy over the respective time period. Furthermore after the burst of the new economy bubble in particular start-up/seed early stage financing lost in importance measured by their respective shares in favour of financing for expansion and later stage financing. This indicates an increasing risk averseness in venture capital financing which might be attributed to the high degree of uncertainty of early stages.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2009-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133642212","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the high-tech bubble in the late 1990s. We intend to identify possible causes and factors that lead to its formation. Using a large sample of 39,673 firm-level observations covering a wide range of firms, we find a positive relationship between venture capital investment and equity overvaluation in the bubble period. Specifically, we find that a firm supported by venture capitalists (VCs) is more likely to be overvalued in the bubble period, especially if it is financed by younger VCs and/or larger VCs. We also find that the lead VC of the syndicate of investors plays an important role. In particular, the investment amount and characteristics of the lead VC, such as its organizational type and experience, are important. Specifically, a VC-backed firm is more likely to be overvalued in the bubble period if the lead VC invests more, and/or has a more independent organizational structure, and/or is more experienced. By examining the responses of experienced VCs to market signals, we further find that less experienced VCs are more likely to invest more when the market booms in the bubble period. In sharp contrast, these correlations generally do not hold or hold only marginally outside the bubble period.
{"title":"Understanding the High-Tech Bubble from Evidence","authors":"Lanfang Wang, Susheng Wang","doi":"10.2139/ssrn.1261222","DOIUrl":"https://doi.org/10.2139/ssrn.1261222","url":null,"abstract":"This paper investigates the high-tech bubble in the late 1990s. We intend to identify possible causes and factors that lead to its formation. Using a large sample of 39,673 firm-level observations covering a wide range of firms, we find a positive relationship between venture capital investment and equity overvaluation in the bubble period. Specifically, we find that a firm supported by venture capitalists (VCs) is more likely to be overvalued in the bubble period, especially if it is financed by younger VCs and/or larger VCs. We also find that the lead VC of the syndicate of investors plays an important role. In particular, the investment amount and characteristics of the lead VC, such as its organizational type and experience, are important. Specifically, a VC-backed firm is more likely to be overvalued in the bubble period if the lead VC invests more, and/or has a more independent organizational structure, and/or is more experienced. By examining the responses of experienced VCs to market signals, we further find that less experienced VCs are more likely to invest more when the market booms in the bubble period. In sharp contrast, these correlations generally do not hold or hold only marginally outside the bubble period.","PeriodicalId":131271,"journal":{"name":"IRPN: Innovation & Entrepreneurship (Topic)","volume":"306 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121221408","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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