IDENTIFICATION OF FACTORS THAT INFLUENCE THE CHOICE OF THE FORM OF INVESTMENT IN GROWTH (ORGANIC OR INORGANIC) OF BRAZILIAN INDUSTRIES
DOI:
https://doi.org/10.4270/ruc.20139Keywords:
Industries. Organic growth. Inorganic growth.Abstract
Different theories about the firm's investment decision, whether or not neoclassical character, tend to consider the influence of organizational structures in determining investment. In modern corporations, to business strategies and organizational structures are taken into account the boundaries of the firm in its horizontal and vertical borders. The purpose of this article is to highlight factors that influence the choice of the form of investment in growth (organic or inorganic) of Brazilian industries. The methodology adopted as the epistemological awareness quantitative positivist paradigm, and about the objectives, the method developed in this research is descriptive and explanatory. The research question to be answered in this research was: There are factors that can be considered crucial to choose between investing in organic growth and inorganic growth in investment as alternative business expansion? The research population consists of 93 publicly traded Brazilian companies analyzed in the period from 1995 to 2008, with secondary data, obtained in "Economática." We used two econometric models: 1) Panel Data Binomial, and 2) Multinomial Logit. The exogenous variables that were statistically significant positive (5%) were: financial slack and sales growth in Panel Binomial and Multinomial Logit; degree of profitability statistically significant negative (5%) in the Multinomial Logit. It can be argued that financial slack increases probability of inorganic growth. Higher level sales also increases the likelihood of inorganic growth in investment. The higher profitability, lower inorganic growth.
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