ETLA publication no 856, 2003

Raine Hermans and
Ilkka Kauranen


The objective of the study is to empirically verify impacts of intellectual capital to the anticipated future sales of small and medium-sized companies within biotechnology industry. Intellectual capital is divided into the following three categories: human, structural, and relational capital. Theoretically, a balanced interaction between the three categories implies value creation potential, and high anticipated sales of the company. In the empirical setting, survey data of small and medium-sized Finnish biotechnology companies is employed. The econometric procedure contains two stages. First, the interaction between three intellectual capital categories is estimated in factor analysis. Second, regression analysis is applied for explaining the anticipated future sales. The interactions within the three categories of intellectual capital explain two thirds of the variations in the anticipated future sales within 5 years. As a result, a well-balanced combination of human capital, structural capital, and relational capital seems to contribute to the highest anticipated sales levels.

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