Acquisition as a growth strategy for young IPO firms

Abstract

Young/small firms are often seen as acquisition targets, but rarely viewed as potential acquirers. However, in this study we found that one-third of the young ventures in our sample pursued aggressive growth though acquisition of their competitors. Furthermore, contrary to conventional wisdom, we found striking evidence that young firms pursuing growth via acquisition significantly outperformed their peers who pursued growth via internal development. Thus, growth via acquisition clearly represents a viable strategic option for young, small firms.

Citation

Shrader, R.C., Monllor, J. and Shelton, L. (2009), "Acquisition as a growth strategy for young IPO firms", Lumpkin, G.T. and Katz, J.A. (Ed.) Entrepreneurial Strategic Content (Advances in Entrepreneurship, Firm Emergence and Growth, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 77-101. https://doi.org/10.1108/S1074-7540(2009)0000011005