Entrepreneurs’ capital budgeting orientations and innovation outputs: evidence from Australian biotechnology firms

Mathew Hayward, Andrew Caldwell, John Steen, David Gow, Peter W Liesch

Research output: Contribution to journalArticleResearchpeer-review

17 Citations (Scopus)


How do different kinds of planning orientations affect entrepreneurial firms’ innovation outputs? To address this question, we position real options reasoning (ROR) and net present value (NPV) as business planning orientations with distinctive heuristics. We empirically investigate heterogeneity in entrepreneurs’ business planning in terms of these ROR and NPV orientations and we relate this heterogeneity to material new venture outcomes. Key decision makers from biotechnology start-ups in Australia were surveyed and results from Generalized Method of Moments estimation models showed that an ROR orientation positively relates to the innovation outputs of new ventures in our sample, whereas a stronger NPV orientation is negatively associated with innovation outputs. We offer implications for the literatures on strategic decision-making and planning.

Original languageEnglish
Pages (from-to)121-133
Number of pages13
JournalLong Range Planning
Issue number2
Publication statusPublished - 1 Apr 2017

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