 Theory and evidence on mergers and acquisitions by small and medium enterprisesUtz Weitzel and Killian McCarthy International Journal of Entrepreneurship and Innovation Management, 2011, vol. 14, issue 2/3, 248-275 Abstract: The theory of mergers and acquisitions (M&As) has been developed almost exclusively from the study of large deals by large firms. In this paper, we argue that the behaviour and success of M&As by small and medium sized enterprises (SMEs) may be significantly different. Accordingly, we revisit established M&A theories and develop a theoretical framework and several testable hypotheses, regarding the distinctive features of SME M&As. Our empirical results support our expectations and show that, compared to large firms, acquiring SMEs rely more intensively on external growth via M&As, are more likely to be withdrawn, suggesting that SMEs are more flexible and more able to avoid deals that turn sour. Finally, SME M&As are more likely to be financed with equity rather than debt, indicating that the influential financial pecking order theory is of less relevance to SMEs. Keywords: mergers; acquisitions; small and medium-sized enterprises; SMEs; large firms; external growth; flexibility; business deals; equity; debt; pecking order theory; USA; United States; Western Europe; entrepreneurship; innovation management; entrepreneurial finance. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijeima:v:14:y:2011:i:2/3:p:248-275 Access Statistics for this article More articles in International Journal of Entrepreneurship and Innovation Management from Inderscience Enterprises Ltd |
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