The geographic concentration variable was significantly positively related to MVA and RMVA at the 0.05 level in Model 1.
However, this measure was not significantly related to RMVA. These results provide mixed support for hypothesis 2.
T Location .175 0.03 .139 0.09 Location squared -0.051 0.54 Firm citations .390 0.01 .409 0.01 Patents .021 0.22 .031 0.27 Rate of new product development .151 0.05 .147 0.05 R&D intensity .369 0.01 .345 0.01 Age .056 0.38 .074 0.41 # Employees .302 0.01 .313 0.01 Adjusted [R.sup.2] 0.334 0.352 F-Statistic 7.3 0.0001 6.8 0.0001 n = 89 The number of patents controlled by the firm was not significantly related to MVA or RMVA. No support was found for hypothesis 3.
The rate of new product development was positively related to MVA and RMVA at the 0.05 level.
The measure of relative R&D intensity was significantly positively related to MVA and RMVA at the 0.01 level.
As stated earlier, the goals of this study were to introduce and justify the use of MVA and RMVA as measures of new venture performance and to test the relationship between firm-specific capabilities and wealth creation in new ventures.
Four of our six hypotheses received support at the 0.05 level or better for MVA and three of the six hypotheses were supported at the 0.05 level for RMVA. We were able to explain over a third of the variation in the absolute amount of wealth created by the firms in our sample.
However, the lack of results for RMVA appears to indicate that this factor does not improve the returns on invested capital.
A one standard deviation increase in the rate of new product development (0.8 new products/yr) would lead to an increase of over $9 million in wealth and a 0.64 increase in RMVA. Clearly, the rate of new product development is critical to new venture performance, as argued by Stalk and Hout (1990).
Simply shifting one percentage point of spending from other expenditures to R&D spending increases the wealth created by the company by over $540,000 and RMVA by 0.037.