The role of R&D intensity, technical development and absorptive capacity in creating entrepreneurial wealth in high technology start-ups

This study uses 80 newly public pharmaceutical biotechnology companies to explore the relationship between a high technology venture's R&D intensity, technical capabilities and absorptive capacity and the amount of entrepreneurial wealth created by the venture. A novel measure of absorptive capacity based on co-citation analysis of a firm's scientific publications is developed and several indicators of technical capabilities are used to develop early and late stage measures of a firm's technical capabilities. The results provide strong evidence of a positive relationship between a high technology venture's R&D intensity, late stage technical capabilities and absorptive capacity and the amount of entrepreneurial wealth coated by a high technology venture. (C) 2001 Elsevier Science B.V. All rights reserved.