Does Corporate Growth Really Matter in the Restaurant Industry?

Abstract

In this study, the authors hypothesize that growth strategies are not necessarily always performance-enhancing strategies that are sustainable. This is contrary to what industry managers tend to believe to be the outcome of growth strategies. Based on past research, a second hypothesis is developed that corporate liquidity impacts performance in a more positive way than growth strategies, and therefore, should be considered in the decision-making framework of firms before they launch into new products and/or markets. The interrelationship between corporate growth and liquidity is also tested, which further highlights the importance of pursuing corporate liquidity.