IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v26y2005i2p129-138.html
   My bibliography  Save this article

Understanding the implications of empirical work on corporate growth rates

Author

Listed:
  • P. A. Geroski

    (London Business School, UK)

Abstract

This paper builds on the empirical literature on corporate growth rates - which suggests that corporate growth rates are very nearly random - and asks whether this empirical work is consistent with standard theories of the firm. We examine both static and dynamic optimizing models of firm output choice, before moving on to examine production functions modelling of corporate learning, models of R&D competition and diversification. In all cases, it seems clear that random corporate growth rates are more or less exactly what one would expect these models to predict. However, the literature on Penrose effects - dynamic managerial limitations to growth - and corporate competencies are not easy to reconcile with random corporate growth rates. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • P. A. Geroski, 2005. "Understanding the implications of empirical work on corporate growth rates," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 129-138.
    • Handle: RePEc:wly:mgtdec:v:26:y:2005:i:2:p:129-138
    DOI: 10.1002/mde.1207
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/mde.1207
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.1207?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Paul A. Geroski & Stephen J. Machin & Christopher F. Walters, 1997. "Corporate Growth and Profitability," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 171-189, June.
    3. Geroski, P. A. & Van Reenen, J. & Walters, C. F., 1997. "How persistently do firms innovate?," Research Policy, Elsevier, vol. 26(1), pages 33-48, March.
    4. Geroski, Paul A & Machin, Stephen & Walters, Christopher F, 1997. "Corporate Growth and Profitability," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 171-189, June.
    5. Slater, Martin, 1980. "The Managerial Limitation to the Growth of Firms," Economic Journal, Royal Economic Society, vol. 90(3593), pages 520-528, September.
    6. Nelson, Charles R. & Plosser, Charles I., 1982. "Trends and random walks in macroeconmic time series : Some evidence and implications," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 139-162.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Geroski, Paul A, 1999. "The Growth of Firms in Theory and in Practice," CEPR Discussion Papers 2092, C.E.P.R. Discussion Papers.
    2. Okada, Yosuke, 2005. "Competition and productivity in Japanese manufacturing industries," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 586-616, December.
    3. Farasat A. S. Bokhari & Franco Mariuzzo & Anna Rita Bennato, 2021. "Innovation and growth in the UK pharmaceuticals: the case of product and marketing introductions," Small Business Economics, Springer, vol. 57(1), pages 603-634, June.
    4. P. Geroski, 1998. "An Applied Econometrician's View of Large Company Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 271-294, June.
    5. G. Urga & P. A. Geroski & S. Lazarova & C. F. Walters, 2003. "Are differences in firm size transitory or permanent?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(1), pages 47-59.
    6. Cucculelli, Marco & Ermini, Barbara, 2012. "New product introduction and product tenure: What effects on firm growth?," Research Policy, Elsevier, vol. 41(5), pages 808-821.
    7. Nan Zhou & Seung H. Park, 2020. "Growth or profit? Strategic orientations and long‐term performance in China," Strategic Management Journal, Wiley Blackwell, vol. 41(11), pages 2050-2071, November.
    8. Zdeňka Náglová, 2018. "Investment Subsidies in the Meat Industry and Their Impact on Business Economics," Central European Business Review, Prague University of Economics and Business, vol. 2018(1), pages 37-45.
    9. Marco Corsino, 2008. "Product Innovation and Growth: The Case of Integrated Circuits," ROCK Working Papers 047, Department of Computer and Management Sciences, University of Trento, Italy, revised 23 Jun 2008.
    10. Gandal, Neil, 2001. "The dynamics of competition in the internet search engine market," International Journal of Industrial Organization, Elsevier, vol. 19(7), pages 1103-1117, July.
    11. Bruno Amable & Jean-Bernard Chatelain & Kirsten Ralf, 2004. ""Deep Pockets": Research and Development Persistence and Economic Growth," Money Macro and Finance (MMF) Research Group Conference 2004 47, Money Macro and Finance Research Group, revised 13 Oct 2004.
    12. Levent Ataünal & Ali Osman Gürbüz & Asli Aybars, 2016. "Does High Growth Create Value for Shareholders? Evidence from S&P500 Firms," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2016(3), pages 25-38.
    13. Tavassoli, Sam & Karlsson, Charlie, 2015. "Persistence of various types of innovation analyzed and explained," Research Policy, Elsevier, vol. 44(10), pages 1887-1901.
    14. Nuri YILDIRIM, 2011. "No Appealing Future For High Growth – Low Profitability Firms: Evidence from Turkey’s Top 1000," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 26(307), pages 31-45.
    15. Marco Cucculelli, 2018. "Firm age and the probability of product innovation. Do CEO tenure and product tenure matter?," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 153-179, January.
    16. Alex Coad, 2007. "A Closer Look at Serial Growth Rate Correlation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(1), pages 69-82, August.
    17. G. Silverberg, 2007. "Long Waves: Conceptual, Empirical and Modelling Issues," Chapters, in: Horst Hanusch & Andreas Pyka (ed.), Elgar Companion to Neo-Schumpeterian Economics, chapter 50, Edward Elgar Publishing.
    18. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    19. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    20. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:26:y:2005:i:2:p:129-138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.