New Persepctives on Firm Growth

ACE Director Per Davidsson has published a new book, New Perspectives on Firm Growth, together with Professor Johan Wiklund of Syracuse University, USA. The issue of how firm growth is achieved and managed, and what consequences it has for different stakeholders is both theoretically interesting and practically important. The book contains a series of studies that extend previous research by providing stronger theoretical underpinnings and using longitudinal databases that can separate in time the firms’ growth from its presumed causes. The studies also break new ground by examining the causes and effects of different forms of growth, such as sales growth vs. employment growth, and organic growth vs. acquisition-based expansion. Further, the studies take a critical look at under what circumstances high growth is associated with high profitability. Not least this latter issue is something that should be of great interest also to practitioners. The researchers’ main finding on this issue is that sound, profitable growth usually starts with attaining high profitability at lower rates of growth. Firms that expand at low levels of initial profitability do not generally become more profitable as a result of their increased size. Instead, these firms are often found to have low growth as well as low profitability in the period following a growth spurt.

One Comment

  • Dr. Tom McKaskill

    Congratulations on the new book. A much needed topic poorly understood and under researched. Insights into what creates growth is essential for a understanding of entrepreneurship. Hopefully this will encourage more work in this critical area.

    Dr. Tom McKaskill

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