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Firm growth in the course of mergers and acquisitions

Burghardt, Dirk ; Helm, Marco

In: Small Business Economics, 2015, vol. 44, no. 4, p. 889-904

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    Titre
    • Firm growth in the course of mergers and acquisitions
    Auteur
    • Burghardt, Dirk. Department of Economics, University of St. Gallen, Varnbüelstrasse 19, 9000, St. Gallen, Switzerland
    • Helm, Marco. Secretariat of the Swiss Competition Commission, Monbijoustrasse 43, 3003, Bern, Switzerland
    Type de document
    • Postprint
    Langue
    • Anglais
    Publié dans
    • Small Business Economics, 2015, vol. 44, no. 4, p. 889-904. Springer US; http://www.springer-ny.com
    Autre version électronique
    Identifiant OAI-PMH
    • oai:doc.rero.ch:331966
    Summary
    This paper examines the effect of mergers and acquisitions on employment growth in newly acquired firm establishments. Based on a unique full sample of manufacturing and services firms in Switzerland, our main finding is that the relative size of a deal is an important growth determinant: While the initial size of the acquiring firm is positively related to an acquired establishment's growth, the opposite holds true for the initial size of the acquisition. We also contribute to a controversial debate on firm growth in general by rejecting Gibrat's law of proportionate growth for firm establishments in Switzerland. In fact, employment growth decreases with an establishment's initial size and age—at the aggregate level as well as within separate subsamples of manufacturing and services firms.