Firm knowledge and market value in biotechnology

We examine the relationship between the characteristics of the firms' knowledge base in terms of knowledge capital and knowledge integration and the stock market value of 84 firms active in biotechnology during the 1990s. Panel data regression models show that the degree of knowledge integration within firms is a significant explanatory variable of firms' stock market value. Moreover, knowledge integration becomes an increasingly important determinant of market value, which illustrates the growing integration of biotechnology in several industrial applications. However, the role of knowledge is sector specific, revealing differences in the extent to which biotechnology has become a key technology.