Auteurs
Valérie MOATTI
Pierre DUSSAUGE
Abstract
The size-performance relationship has long been a major research topic both in industrial organization and in strategy. In the late sixties, it has given rise to such famous strategy concepts as the so-called “experience curve”, but has since generated only limited interest. More recently, much research has been devoted to examining mergers and acquisitions on the one hand, and inter-firm alliances on the other hand. Both these moves affect a firm’s size in one way or another and are thus likely to have an impact on performance. However, the work on M&As or on alliances very rarely compares these different modes of growth to one another, or to organic growth. Our research aims specifically at analyzing the impact of each alternative mode of growth on the size effects resulting from the achieved growth. In this paper we develop conceptual arguments on the relative impact of these modes of growth on performance. We then test the resulting hypotheses on a sample of 54 firms in the global retail sector over the 1984-2001 period. Our initial results suggest that both M&As and alliances negatively affect performance. However, we show that the choice to form alliances or engage in M&As is determined by firm characteristics that also affect performance; when accounting for this endogeneity, we find that neither alliances nor M&As have a significant impact on performance.
