The boundary conditions for growth: Exploring the non-linear relationship between organic and acquisitive growth and profitability

IF 7.4 2区 管理学 Q1 BUSINESS
Martin Weiss , Dominic Herrmann , Theodore A. Khoury , Markus Kreutzer , Marc Hummel
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Abstract

The nature of the relationship between growth and profitability remains inconclusive, despite prior research. To contribute to a better understanding of the growth-profitability relationship, we examine its non-linear character. We achieve this by deconstructing growth into organic and acquisitive modes, and by theorizing how the particular costs and benefits of each mode affect the profitability, which we measure as return on assets. Furthermore, we propose that the interaction of these two modes can also affect profitability. By studying these relationships with a panel data set of established German firms during a 13-year period, we uncover an inverted U-shaped relationship between growth and profitability that is mainly driven by acquisitive growth. These decreasing returns at higher levels of acquisitive growth are related to the higher internal costs of managing acquisitions. Consistent with our logic, we find that organic growth has a declining positive profitability effect. The interaction of both growth modes also shows that increasing acquisitive growth negatively impacts the positive effect of organic growth on profitability.

增长的边界条件:探索有机和获得性增长与盈利能力之间的非线性关系
尽管已有研究,但增长和盈利能力之间关系的本质仍然没有定论。为了更好地理解增长-盈利关系,我们考察了其非线性特征。我们通过将增长分解为有机模式和收购模式来实现这一点,并通过理论化每种模式的特定成本和收益如何影响盈利能力,我们将其作为资产回报来衡量。此外,我们提出这两种模式的相互作用也会影响盈利能力。通过对13年期间德国老牌企业的面板数据集进行研究,我们发现增长和盈利能力之间存在倒u型关系,这种关系主要由收购增长驱动。收购增长水平越高,回报越低,这与管理收购的内部成本越高有关。与我们的逻辑一致,我们发现有机增长具有下降的正盈利效应。两种增长模式的相互作用也表明,收购性增长的增加对有机增长对盈利能力的积极作用产生了负面影响。
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来源期刊
CiteScore
13.00
自引率
7.10%
发文量
75
期刊介绍: Long Range Planning (LRP) is an internationally renowned journal specializing in the field of strategic management. Since its establishment in 1968, the journal has consistently published original research, garnering a strong reputation among academics. LRP actively encourages the submission of articles that involve empirical research and theoretical perspectives, including studies that provide critical assessments and analysis of the current state of knowledge in crucial strategic areas. The primary user base of LRP primarily comprises individuals from academic backgrounds, with the journal playing a dual role within this community. Firstly, it serves as a platform for the dissemination of research findings among academic researchers. Secondly, it serves as a channel for the transmission of ideas that can be effectively utilized in educational settings. The articles published in LRP cater to a diverse audience, including practicing managers and students in professional programs. While some articles may focus on practical applications, others may primarily target academic researchers. LRP adopts an inclusive approach to empirical research, accepting studies that draw on various methodologies such as primary survey data, archival data, case studies, and recognized approaches to data collection.
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