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External growth strategy and performance: An empirical study of French SMEs

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  • Vivien Lefebvre
  • Anaïs Hamelin

Abstract

We examine the impact of small firms? external growth strategy on their performance using unique data on all French small firms that went public between 2006 and 2014. Using a difference-in-differences approach, we find that small firms conducting acquisitions experience higher profitability than small firms relying on other growth modes. However, we observe no effect of acquisitions on sales growth. The results are robust to different robustness checks, including propensity-score matching. Our findings support the idea that acquisitions are strategic organizational changes more than ?growth? operations. Furthermore, we provide empirical insights on the importance of external growth strategies for SMEs. JEL classification: G34, L20, L25.

Suggested Citation

  • Vivien Lefebvre & Anaïs Hamelin, 2021. "External growth strategy and performance: An empirical study of French SMEs," Revue d'économie industrielle, De Boeck Université, vol. 0(1), pages 79-105.
    • Handle: RePEc:cai:reidbu:rei_173_0079
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    Keywords

    small businesses; growth; mergers and acquisitions; performance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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