{"title":"Structural Expansion vs. Structural Reorganization","authors":"Susheng Wang","doi":"10.2139/ssrn.2792292","DOIUrl":null,"url":null,"abstract":"This paper discusses firms’ growth strategies: organic growth (internally generated growth) vs. inorganic growth (growth via acquisitions). We find that when market uncertainty drops, a decentralized firm (D-firm) is more likely to carry out a structural expansion (inorganic), while a centralized firm (C-firm) is more likely to carry out a structural reorganization (organic). When market competition subsides, a D-firm is more likely to carry out a structural reorganization or stay put, while a C-firm is more likely to carry out a structural expansion or stay put. When the market expands, a D-firm is more likely to carry out a structural expansion or stay put, while a C-firm is more likely to carry out a structural reorganization.","PeriodicalId":236717,"journal":{"name":"ERN: Other Microeconomics: Intertemporal Firm Choice & Growth","volume":"71 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2016-05-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Other Microeconomics: Intertemporal Firm Choice & Growth","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.2792292","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
This paper discusses firms’ growth strategies: organic growth (internally generated growth) vs. inorganic growth (growth via acquisitions). We find that when market uncertainty drops, a decentralized firm (D-firm) is more likely to carry out a structural expansion (inorganic), while a centralized firm (C-firm) is more likely to carry out a structural reorganization (organic). When market competition subsides, a D-firm is more likely to carry out a structural reorganization or stay put, while a C-firm is more likely to carry out a structural expansion or stay put. When the market expands, a D-firm is more likely to carry out a structural expansion or stay put, while a C-firm is more likely to carry out a structural reorganization.