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

Vivien Lefebvre and Anaïs Hamelin

Revue d'économie industrielle, 2021, vol. n° 173, issue 1, 79-105

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.

Keywords: small businesses; growth; mergers and acquisitions; performance (search for similar items in EconPapers)
JEL-codes: G34 L20 L25 (search for similar items in EconPapers)
Date: 2021
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