TY - JOUR
T1 - Processes of firm growth and diversification
T2 - Theory and evidence
AU - Coad, Alexander Jean-Luc
AU - Guenther, C.
PY - 2014/2/27
Y1 - 2014/2/27
N2 - Investigating the role of diversification in the firm growth process, we build on Penrose's (The theory of the growth of the firm. Oxford University Press, Oxford, 1959) Theory of the Growth of the Firm to formulate hypotheses about growth of employment, assets and sales in the years before, during and after a new product introduction. We exploit a new database from the German machine tool industry that boasts a detailed and meaningful definition of diversification. Our exploratory analyses indicate that diversification, in terms of product introductions, is preceded by employment growth. Moreover, we find support that diversification is positively associated with subsequent asset growth, but negatively associated with subsequent employment growth.
AB - Investigating the role of diversification in the firm growth process, we build on Penrose's (The theory of the growth of the firm. Oxford University Press, Oxford, 1959) Theory of the Growth of the Firm to formulate hypotheses about growth of employment, assets and sales in the years before, during and after a new product introduction. We exploit a new database from the German machine tool industry that boasts a detailed and meaningful definition of diversification. Our exploratory analyses indicate that diversification, in terms of product introductions, is preceded by employment growth. Moreover, we find support that diversification is positively associated with subsequent asset growth, but negatively associated with subsequent employment growth.
KW - Diversification
KW - Firm growth
KW - Growth process
KW - Machine tools
KW - Penrose
U2 - 10.1007/s11187-014-9566-4
DO - 10.1007/s11187-014-9566-4
M3 - Journal article
AN - SCOPUS:84894245756
SN - 0921-898X
VL - 43
SP - 857
EP - 871
JO - Small Business Economics
JF - Small Business Economics
IS - 4
ER -