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Edith Penrose’s Theory of the Growth of the Firm and the strategic management of multinational enterprises

Author

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  • Peter J. Buckley

    (University of Leeds)

  • Mark Casson

    (University of Reading)

Abstract

and Key Results This paper provides a formal model of Edith Penrose’s Theory of the Growth of the Firm which has important implications for the strategy of multinational enterprises. The model provides an analysis of the trade-off between product diversification and foreign market penetration. It also can account for the speed of entry into foreign markets. Formalizing Penrose’s Theory of the Growth of the Firm provides an account of internationalization incorporating geographical expansion patterns, sequential decision making and learning.

Suggested Citation

  • Peter J. Buckley & Mark Casson, 2007. "Edith Penrose’s Theory of the Growth of the Firm and the strategic management of multinational enterprises," Management International Review, Springer, vol. 47(2), pages 151-173, March.
  • Handle: RePEc:spr:manint:v:47:y:2007:i:2:d:10.1007_s11575-007-0009-1
    DOI: 10.1007/s11575-007-0009-1
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    References listed on IDEAS

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    1. Alan M. Rugman & Alain Verbeke, 2004. "A Final Word on Edith Penrose," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 205-217, January.
    2. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    3. Penrose, Edith T., 1960. "The Growth of the Firm—A Case Study: The Hercules Powder Company," Business History Review, Cambridge University Press, vol. 34(1), pages 1-23, April.
    4. Andy Lockett & Steve Thompson, 2004. "Edith Penrose's Contributions to the Resource‐based View: An Alternative Perspective," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 193-203, January.
    5. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
    6. S.A. Lippman & R.P. Rumelt, 1982. "Uncertain Imitability: An Analysis of Interfirm Differences in Efficiency under Competition," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 418-438, Autumn.
    7. Pitelis, Christos (ed.), 2002. "The Growth of the Firm: The Legacy of Edith Penrose," OUP Catalogue, Oxford University Press, number 9780199248520.
    8. Michael Best & Jane Humphries, 2003. "Edith Penrose: A Feminist Economist?," Feminist Economics, Taylor & Francis Journals, vol. 9(1), pages 47-73.
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    Cited by:

    1. Christos Pitelis & Alain Verbeke, 2007. "Edith Penrose and the future of the multinational enterprise: New research directions," Management International Review, Springer, vol. 47(2), pages 139-149, March.
    2. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    3. Li, Lei & Li, Dan & Goerzen, Anthony & Shi, Weilei (Stone), 2018. "What and how do SMEs gain by going international? A longitudinal investigation of financial and intellectual resource growth," Journal of World Business, Elsevier, vol. 53(6), pages 817-834.
    4. Lee Li & Gongming Qian & Zhengming Qian, 2015. "Should Small, Young Technology–Based Firms Internalize Transactions in Their Internationalization?," Entrepreneurship Theory and Practice, , vol. 39(4), pages 839-862, July.
    5. Patrick Regnér & Udo Zander, 2011. "Knowledge and Strategy Creation in Multinational Companies," Management International Review, Springer, vol. 51(6), pages 821-850, December.
    6. Peter J. Buckley, 2011. "International Integration and Coordination in the Global Factory," Management International Review, Springer, vol. 51(2), pages 269-283, April.
    7. Shameen Prashantham & Stephen Young, 2011. "Post–Entry Speed of International New Ventures," Entrepreneurship Theory and Practice, , vol. 35(2), pages 275-292, March.
    8. Andy Lockett & Johan Wiklund & Per Davidsson & Sourafel Girma, 2011. "Organic and Acquisitive Growth: Re‐examining, Testing and Extending Penrose's Growth Theory," Journal of Management Studies, Wiley Blackwell, vol. 48(1), pages 48-74, January.

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