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Start-ups, firm growth and the consolidation of the French biotech industry

  • Avenel, E.
  • Corolleur, F.
  • Gauthier, C.
  • Rieu, C.

Based on an original dataset, we analyze empirically the determinants of firm growth in the French biotech industry during two periods, 1996-1999 and 1999-2002. We have two main results. First, Gibrat's law is violated. The growth of annual turnover is influenced by teh initial size of the firm. The effect is non-linear, negative for small firms. Second, location has a significant impact on growth. We use different sets of dummies to characterize location and different measures of firm growth. As a whole, our results point at Marseilles (and its region) and Nanterre (but not Paris and Evry) as favorable places for the growth of firms between 1999 and 2002. For the 1996-1999, the favorable places are Strasbourg (and Alsace) and Rh“ne-Alpes (Lyon/Grenoble). Our analysis thus suggests that the changes in the (notably legal) environment of French biotech firms that took place in 1999 had a drastic effect of the comparative advantages of locations for biotech firms.

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Paper provided by Grenoble Applied Economics Laboratory (GAEL) in its series Working Papers with number 200503.

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Date of creation: 2005
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Handle: RePEc:gbl:wpaper:200503
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