Connaughton, J; Meikle, J; Teerikangas, S; (2015) Mergers, acquisitions and the evolution of construction professional services firms. Construction Management and Economics , 33 (2) pp. 146-159. 10.1080/01446193.2015.1037325.

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Abstract

Whilst mergers and acquisitions are a favoured means of strategic renewal and expansion for firms, scant academic attention has been placed on the growth patterns of construction professional services firms (CPSFs). This paper focuses on the role of mergers and acquisitions in the evolution of CPSFs. The findings are based on an analysis of the growth patterns of the top 25 CPSFs in the United Kingdom between 1988 and 2013. Since the 1990s, the increase in merger and acquisition activity has shaped the size, international presence, and multidisciplinary reach of the major CPSFs. However, CPSFs differ with respect to the intensity with which mergers and acquisitions are pursued. Whilst large, public limited companies are active acquirers, smaller and/or privately-owned firms succeed in growing with a more selective acquisitive strategy, as they tend to rely more on organic growth. The findings call construction economists to attend to how acquisitions are radically changing the construction landscape and its main players. As the competitive advantage of firms is increasingly human capital-based, the example of the privately-owned CPSFs that rely on organic modes of growth prompts a critical rethink of the role of mergers and acquisitions in firm growth.

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