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Article
Publication date: 4 January 2021

Annelies Bobelyn, Bart Claryse and Mike Wright

This paper aims to study the effect of two important marketing decisions on the extent of value capturing by the firm owners. First, it addresses the debate whether acquirers of…

Abstract

Purpose

This paper aims to study the effect of two important marketing decisions on the extent of value capturing by the firm owners. First, it addresses the debate whether acquirers of young technology-based firms value targets that span multiple technology and market categories indicating multiples options for growth or prefer more narrowly defined targets with a clear product and market focus. Second, it investigates to what extent the use of alliances for marketing purposes contributes to value capturing and how they moderate the effect of diversification of technology and marketing.

Design/methodology/approach

To estimate the acquisition price, a linear regression model is used, including a Heckman correction controlling for the likelihood of being acquired. The hypotheses are tested in a sample of British venture capital backed firms.

Findings

Firms that convey focus in their marketing activities (either because they focus on a few market categories or because they rely on downstream alliance to market their inventions) receive higher valuations at acquisition than those that diversify. Further, also the size of the product portfolio is negatively correlated to the acquisition price. Finally, the results reveal that firms with a broad patent portfolio can reduce the negative effects on firm value by engaging in less downstream alliances.

Originality/value

This paper advances existing research on exit strategies for entrepreneurial firms by considering factors explaining acquisition prices, instead of acquisition probabilities. Further, it adds the categorization research by demonstrating how acquirers respond to complex combinations of technology and market categories.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 23 no. 1
Type: Research Article
ISSN: 1471-5201

Keywords

Open Access
Article
Publication date: 14 September 2022

Sanna Joensuu-Salo, Anmari Viljamaa and Emilia Kangas

This paper aims to examine the growth rates of small- and medium-sized enterprises (SMEs) over a three-year period, the relationship between firm size and firm growth in the…

3614

Abstract

Purpose

This paper aims to examine the growth rates of small- and medium-sized enterprises (SMEs) over a three-year period, the relationship between firm size and firm growth in the context of SMEs, and the effect of marketing capability (MC) on firm growth and how it relates to firm size. The theoretical framework is based on the resource-based view and dynamic capabilities.

Design/methodology/approach

Data were gathered from Finnish SMEs (n = 214) and analyzed with Latent growth curve modeling (structural equation modeling). Respondents were chief executive officers or company owners.

Findings

Results show that firm size is unrelated to the rate of change, and MC has a significant effect on both the intercept and slope parameters. Smaller SMEs have less MC than larger SMEs.

Practical implications

While the overall human resources level of the SME is not linked to the rate of growth, MC is. This is an important point for small business growth studies, for it shows what type of personnel is called for during rapid growth. SMEs could advance significantly and rapidly if they invest in versatile human capital, especially in the marketing area.

Originality/value

Majority of the MC research involves larger corporations. This study brings new insights from SME perspective. In addition, this study suggests that it is imperative to consider different types of growth separately. This study contributes to this need by demonstrating the connection between employee growth rate and MC in SMEs.

Details

Journal of Research in Marketing and Entrepreneurship, vol. 25 no. 2
Type: Research Article
ISSN: 1471-5201

Keywords

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