Kicking Up Dust: Growth As An Irrational Market Response

Abstract

This paper introduces the concept of irrational growth, defined as a growthstrategy that cannot (or will not) succeed in generating economic profits. Growth is afrequently utilized performance indicator, yet examining strategy research, the relationshipbetween growth and economic profits is complex. A theoretical foundationbased on institutional theory suggests that growth is adopted regardless oflikelihoodof positive economic outcomes. Propositions for testing an institutional bias towardsgrowth are developed and research directions are suggested.