This article attempts to identify the factors affecting location of biotechnology firms in the United States. To achieve this goal, the regional efficiency in the biotech industry is measured using the Data Envelopment Analysis (DEA). We investigate the causal structure of the regional biotech industry performance and a set of other locational variables using the Directed Acyclic Graph (DAG). Clustering the biotech industry directly enhances the regional industry efficiency, and the high-tech infrastructure and regional income directly affect the clustering the biotech industry.