A model of professional service firms performance with an application to US accounting firms

Edouard Ribes (1)

1 CERNA i3 - Centre d'économie industrielle i3

This paper models the dynamics of professional services firms performance. To do so, it first describes how those firms produce their specific outputs and how their productivity drives competitiveness. The associated equilibrium in then used to propose profit optimal organic and inorganic growth strategies, which are then discussed to account for the effect of potential future technological disruption. Applying the proposed theory to US accounting firms explains the differences in performance observed between large (i.e. more than 50 partners) and small (i.e. less than 50 partners) accounting partnerships and suggests that small (resp. large) US accounting partnerships mainly grow inorganically (resp. organically).

Mots clés: Professional Services; Firm performance

Domaines: Economies et finances; Microstructure des marchés [q-fin.TR]

Edouard Ribes. A model of professional service firms performance with an application to US accounting firms. 2019. ⟨hal-01825739v4⟩