Jagadeesh Sivadasan, Natarajan Balasubramanian, Ravi Dharwadkar and Charlotte Ren. Accepted by Strategic Management Journal. 2024.

Research Summary. Although firms grow using many modes, studies typically examine individual modes, usually transactional. This impedes our understanding of the relative importance of growth modes, correlations amongst them, and their associations with competition and firm performance. To shed light on these aspects, we decompose employment growth in all U.S. firms (2004–2013) into seven modes. We find that organic modes such as opening or closing plants contribute more than transactional modes such as acquisitions and sell-offs, and that growth modes exhibit age-size differences and are generally positively correlated within firms. Trade competition in manufacturing increased closures and decreased acquisitions but had no effect on new units. Transactional growth positively correlates with future survival, unlike organic growth. Together, these findings expand our understanding of firm growth and compel us to view it as a composite of multiple modes.