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Sustainability 2017, 9(1), 108; doi:10.3390/su9010108

Factors Affecting the Survival of SMEs: A Study of Biotechnology Firms in South Korea

1
Graduate School of Health Science Business Convergence, College of Medicine, Chungbuk National University, 1 Chungdae-ro, Seowin-gu, Cheongju-si 28644, Korea
2
Technology Strategy and Planning Team, Samsung SDS, SDS West Campus 22F, 125, Olympic-ro 35, Songpa-gu, Seoul 05510, Korea
3
Graduate School of Technology & Innovation Management, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 133-791, Korea
4
Management Research Center, Seoul National University, 1 Gwanak-ro, Gwanak-gu, Seoul 08826, Korea
*
Author to whom correspondence should be addressed.
Academic Editor: Yongrok Choi
Received: 9 November 2016 / Revised: 6 January 2017 / Accepted: 9 January 2017 / Published: 13 January 2017
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [602 KB, uploaded 13 January 2017]   |  

Abstract

Past studies examining survival factors of biotechnology firms have focused on pioneer countries, such as the USA, the UK and Germany. However, as the biotechnology industry in Asia is reaching the take-off stage and showing a high growth rate, the research on survival factors in the context of Asian latecomers is needed. The present research investigates internal and external factors affecting the survival of SMEs (Small and Medium-sized Enterprises) in the biotechnology industry in South Korea. The Cox hazard model was employed to perform a robust estimation in survival analysis. The analysis of internal factors showed that the origin of a firm (i.e., having prior experience or spin-offs) and the business sub-sector (i.e., platform-based) affect the hazard rates of biotechnology firms. In terms of external factors, unlike strategic alliances, government R&D funding lowered hazard rates for the firm’s survival. Additionally, considering that the reasons of firm exit can be divided into bankruptcy and M&A (Mergers and Acquisitions), the different effects of origins from other firms and strategic alliance for firm survival are confirmed. The results suggest that prior experience, platform-based and constant government R&D funding contribute to the sustainable development of SMEs in the biotechnology industry. View Full-Text
Keywords: firm survival; firm origin; platform-based firm; government R&D funding; strategic alliance; SMEs; biotechnology industry firm survival; firm origin; platform-based firm; government R&D funding; strategic alliance; SMEs; biotechnology industry
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Shin, K.; Park, G.; Choi, J.Y.; Choy, M. Factors Affecting the Survival of SMEs: A Study of Biotechnology Firms in South Korea. Sustainability 2017, 9, 108.

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