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Growth and profitability in small privately held biotech firms: preliminary findings
Malin Brännback1, Alan Carsrud, Maija Renko
1Abo Akademi University, Department of Business Studies, Henriksgatan 7, FIN-20500 Abo, Finland. Malin.brannback@abo.fi <Malin.brannback@abo.fi>
Abstract:
This paper reports on preliminary findings on a study of the relationship of growth and profitability among small privately held Finnish Life Science firms. Previous research results concerning growth and profitability are mixed, ranging from strongly positive to a negative relationship. The conventional wisdom states that growth is a prerequisite for profitability. Our results suggest that the reverse is the case. A high profitability-low growth biotech firm is more probably to make the transition to high profitability-high growth than a firm that starts off with low profitability and high growth.
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