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Edith Penrose’s Theory of the Growth of the Firm and the Strategic Management of Multinational Enterprises

In: Foreign Direct Investment, China and the World Economy

Author

Listed:
  • Peter J. Buckley

    (University of Leeds (CIBUL))

  • Mark Casson

    (University of Reading)

Abstract

Foss (2002, p. 148) says ‘Penrose’s work is, in the crucial dimensions, at variance with economic orthodoxy … It should be thought of as a contribution to economic heterodoxy’ Penrose and Pitelis (2002, pp. 19 et seq.), in describing Fritz Machlup as ‘Edith’s supervisor’ at Johns Hopkins says ‘A fascinating paradox is how Machlup, a doyen of neo-classical economics, should have been partially responsible for a work so far removed from the mainstream’. Penrose has also been claimed as a feminist economist (Best and Humphries, 2003). Our argu- ment is that Penrose sought to create a theory of the growth of the firm which was logically consistent and empirically tractable. Her sub- sequent adoption as grandmother of the resource based view has only limited validity, based on a selective reading of her work and in defiance of its holistic qualities. See the debate between Rugman and Verbeke (2002, 2004) and Kor and Mahoney (2004) and Lockett and Thompson (2004), the latter based on Penrose’s (1960) analysis of the Hercules Powder Company.

Suggested Citation

  • Peter J. Buckley & Mark Casson, 2010. "Edith Penrose’s Theory of the Growth of the Firm and the Strategic Management of Multinational Enterprises," Palgrave Macmillan Books, in: Foreign Direct Investment, China and the World Economy, chapter 5, pages 53-77, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-24832-8_5
    DOI: 10.1057/9780230248328_5
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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. Svetlana V. OREKHOVA & Larisa Sh. KUDIN & Aleksandra V. KUPERA, 2019. "CEO turnover and company performance: Sensitivity and empirical estimates," Upravlenets, Ural State University of Economics, vol. 10(4), pages 2-13, September.
    3. 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.
    4. Hsu, Wen-yi & Shih, Stone, 2013. "From hybrid TV towards transmedia: Recent marketing advances of the New Media developments," 24th European Regional ITS Conference, Florence 2013 88502, International Telecommunications Society (ITS).
    5. Thomas Hutzschenreuter & Ingo Kleindienst & Christina Guenther & Martin Hammes, 2016. "Speed of Internationalization of New Business Units: The Impact of Direct and Indirect Learning," Management International Review, Springer, vol. 56(6), pages 849-878, December.
    6. Patrick Regnér & Udo Zander, 2011. "Knowledge and Strategy Creation in Multinational Companies," Management International Review, Springer, vol. 51(6), pages 821-850, December.
    7. Michael Neubert, 2023. "A Systematic Literature Review about the Speed of Internationalization," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(2), pages 1-80, February.
    8. 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.
    9. Harsh W. Mishra, 2012. "Book Review: Catherine A. Maritan and Margaret A. Peteraf (Eds), Competitive Strategy, Vols I and II," Vision, , vol. 16(3), pages 222-226, September.
    10. Jason M. Pattit & Katherina G. Pattit & J.-C. Spender, 2024. "Edith T. Penrose: Economist of 'The Ordinary Business of Life'," Strategic Management Review, now publishers, vol. 5(1-2), pages 51-74, April.
    11. Buckley, Peter J., 2016. "The contribution of internalisation theory to international business: New realities and unanswered questions," Journal of World Business, Elsevier, vol. 51(1), pages 74-82.
    12. 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.
    13. 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.
    14. Kano, Hirokazu, 2023. "Early internationalization and subsequent geographic expansion: An extended Penrosean perspective," International Business Review, Elsevier, vol. 32(1).
    15. Shameen Prashantham & Stephen Young, 2011. "Post–Entry Speed of International New Ventures," Entrepreneurship Theory and Practice, , vol. 35(2), pages 275-292, March.
    16. Johan Karlsson, 2021. "Firm size and growth barriers: a data-driven approach," Small Business Economics, Springer, vol. 57(3), pages 1319-1338, October.
    17. Gupta, Parul & Chauhan, Sumedha, 2021. "Firm capabilities and export performance of small firms: A meta-analytical review," European Management Journal, Elsevier, vol. 39(5), pages 558-576.
    18. Peter J. Buckley, 2011. "International Integration and Coordination in the Global Factory," Management International Review, Springer, vol. 51(2), pages 269-283, April.
    19. Pitelis, Christos, 2009. "Edith Penrose’s ‘The Theory of the Growth of the Firm’ Fifty Years Later," MPRA Paper 23180, University Library of Munich, Germany.
    20. Humaira Raffat & Danish Ahmed Siddiqui, 2020. "Does Openness, and Productivity Matters for FDI: A Global Interactive Analysis Based on the Complementary Role of Institutions," Issues in Economics and Business, Macrothink Institute, vol. 6(2), pages 1-21, December.
    21. Li, Lin & Du, Le, 2025. "Location strategy of emerging economy multinational enterprise," International Review of Economics & Finance, Elsevier, vol. 101(C).

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