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dc.contributor.authorWeiss, Martin
dc.contributor.authorHerrmann, Dominic
dc.contributor.authorKhoury, Theodore A.
dc.contributor.authorKreutzer, Markus
dc.contributor.authorHummel, Marc
dc.date.accessioned2023-01-16T06:45:18Z
dc.date.available2023-01-16T06:45:18Z
dc.date.issued2022en_US
dc.identifier.issn0024-6301
dc.identifier.doi10.1016/j.lrp.2022.102291
dc.identifier.urihttp://hdl.handle.net/20.500.12127/7156
dc.description.abstractThe nature of the relationship between growth and profitability remains inconclusive, despite prior research. To contribute to a better understanding of the growth-profitability relationship, we examine its non-linear character. We achieve this by deconstructing growth into organic and acquisitive modes, and by theorizing how the particular costs and benefits of each mode affect the profitability, which we measure as return on assets. Furthermore, we propose that the interaction of these two modes can also affect profitability. By studying these relationships with a panel data set of established German firms during a 13-year period, we uncover an inverted U-shaped relationship between growth and profitability that is mainly driven by acquisitive growth. These decreasing returns at higher levels of acquisitive growth are related to the higher internal costs of managing acquisitions. Consistent with our logic, we find that organic growth has a declining positive profitability effect. The interaction of both growth modes also shows that increasing acquisitive growth negatively impacts the positive effect of organic growth on profitability.en_US
dc.language.isoenen_US
dc.publisherElsevieren_US
dc.subjectGrowth-Profitability Relationshipen_US
dc.subjectProfitabilityen_US
dc.titleThe boundary conditions for growth: Exploring the non-linear relationship between organic and acquisitive growth and profitabilityen_US
dc.identifier.journalLong Range Planningen_US
dc.contributor.departmentUniversity of Erlangen-Nuremberg, Lange Gasse 20, 90403, Nürnberg, Germanyen_US
dc.contributor.departmentPortland State University, The School of Business, 631 SW Harrison Street, Portland, OR, 97201, USAen_US
dc.contributor.departmentEBS Business School, Chair of Strategic & International Management, Rheingaustrasse 1, 65375, Oestrich-Winkel, Germanyen_US
dc.identifier.eissn1873-1872
vlerick.knowledgedomainStrategyen_US
vlerick.typearticleVlerick strategic journal articleen_US
vlerick.vlerickdepartmentEGSen_US
dc.identifier.vperid163047en_US


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