ROLE OF INTANGIBLE INVESTMENTS AND TOTAL ASSETS IN THE BUSINESS PERFORMANCE OF TECHNOLOGICAL COMPANIES - TECHNICAL EFFICIENCY APPROACH

摘要

After the startup period and more than three years of operation, technological companies have been argued to be on more sustainable ground in their existence. Balanced performance control and measurement systems are favored in these environments, and technical uncertainty and technological core competence issues have been solved in the startup phase with some amount of market acceptance and financial success. This research focuses on the performance measurement challenge of two groups of technological companies: (i) those with a history of 3-5 years, and (ii) those with a history of longer than five years. Data Envelopment Analysis (DEA) models (both revenue and profitability oriented) are used in the evaluation of over 1100 different technological companies financed by a Finnish venture capital company. The observation period lasted from 1986 to 2002. As the companies were from 3 to 5 years old, roughly one third of the companies showed on average negative profitability, and therefore these companies could not be managed solely with revenue generating innovations. So, profitability management is a vital issue in these less mature environments, and balanced measurement systems are needed. Companies having more than 5 years of financial history seemed to be generating revenues as well as profits.