Untangling the Web: Investigating the Impact of Stringent Institutional Governance and R&D Focus on Biotechnology IPOs in Europe

Abstract

The role of government in influencing the R&D within the biotech industry is inevitable, emphasizing the impact the of stringent institutional governance and R&D focus on biotechnology IPOs. This study mainly focuses on determining the association between “corruption control (COR), government effectiveness (GE), political stability (PS), rule of law (RL), R&D employees (RNDEMP), R&D expenditure (RNDEXP) and biotechnology initial public offering (IPO)” within the context of Europe. The essential secondary statistical data was collected from essential online sources, including websites of related organizations such as World Bank, within a timeframe of 2002 to 2022. Vector auto-regression (VAR) analysis was done for determining the association between the variables. The findings of this study state that each variable of this study influences other variables. However, IPO has an insignificant association with all other variables, except for RNDEXP. Similarly, RL has a significant association with RNDEMP, while RNDEMP is significantly associated with PS and GE is significantly associated with PS. This study has presented various practical as well as theoretical implications within the context of biotechnology IPOs in Europe, focusing on the promotion of R&D expenditure in this regard.