Acquisitive and Organic Growth in Penrose’s Theory: A Replication and Extension of Lockett, Wiklund, Davidsson, Girma (2011)

We replicate Lockett, Wiklund, Davidsson, and Girma’s (LWDG) (2011) study, which draws on Penrose’s theory to explicate how organic and acquisitive growth interact, using data from 128,368 Dutch firms (2011–2016). Our results confirm LWDG’s finding that past organic growth negatively affects subsequent organic growth. However, unlike LWDG, reporting a positive association, we find that past acquisitive growth reduces subsequent organic growth. Extending LWDG’s framework reveals that this effect turns positive over time, particularly for complementary acquisitions. While our findings align with Penrose’s theory, they also provide a more nuanced understanding of the conditions under which acquisitive growth enhances organic growth.