Business takeovers and firm growth : empirical evidence from a German panel

The present article links business takeovers to the literature on serial autocorrelation of growth rates. The aim of the study is to identify the effects of successions on the performance of small German firms by analysing the growth pathways over a period of eight years after business takeover. Using panel data from 1,872 firms, the present article shows that for the first two years after a business takeover, small firms are subject to negative serial correlation of growth rates regarding employment. The analysis underlines the importance of longitudinal data to provide evidence on changes in the behaviour of a firm following a business takeover.