Business Commons^™

How Does Your Garden Grow? The Interface Of Employee And Sales Growth Post Ipo, Varkey K. Titus Jr., Jenna R. Pieper, Matthew Josefy, Theresa M. Welbourne

Department of Management: Faculty Publications

Research Summary: Firms often succumb to a growth imperative, yet little is known about how congruence between various forms of growth affects firm value. We argue that the (in)congruence between net hiring rates (e.g., growth in the number of employees) and sales growth has significant implications for firm value, assessed via Tobin's Q. We further contend that R&D expenditures and industry dynamism—factors that influence a firm's ability to realize value creation—moderate the relationship between growth pattern and firm value. We use a sample of 1,181 firms that conducted their initial public offerings from 1996 to 2006 to test our conceptual …