Re-Examining and Extending Penrose's Growth Theory: Updating Penrose for the 21st Century

Babson College Entrepreneurship Research Conference (BCERC) 2007

Frontiers of Entrepreneurship Research 2007

15 Pages Posted: 6 Dec 2007

See all articles by Andy Lockett

Andy Lockett

Nottingham University Business School (NUBS)

Johan Wiklund

Syracuse University

Per Davidsson

Queensland University of Technology - Brisbane Graduate School of Business

Abstract

Edith Penrose argued that firms face a constraint on organic growth because of growth activities in previous periods. Central to her ideas about growth is the distinction between managerial and entrepreneurial capabilities. Growth in previous periods creates adjustment costs which are associated with managerial capabilities and impacts on the growth opportunities which are associated with entrepreneurial capabilities. In this paper we revisit Penrose's work to examine how the nature of growth in previous periods may effect growth in the current period. Employing a panel of all commercially active enterprises in the private (non-government) sector in Sweden over a 10 year period our results indicate that previous organic growth acts as a constraint on organic growth, however, acquisitive growth may act as a catalyst for organic growth. Based on these findings, we suggest extensions Penrose's to growth theory.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation

Lockett, Andy and Wiklund, Johan and Davidsson, Per, Re-Examining and Extending Penrose's Growth Theory: Updating Penrose for the 21st Century. Babson College Entrepreneurship Research Conference (BCERC) 2007; Frontiers of Entrepreneurship Research 2007. Available at SSRN: https://ssrn.com/abstract=1059841

Andy Lockett (Contact Author)

Nottingham University Business School (NUBS) ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

Johan Wiklund

Syracuse University ( email )

Whitman School of Management
720 University Avenue
Syracuse, NY 13244-2130
United States

Per Davidsson

Queensland University of Technology - Brisbane Graduate School of Business ( email )

Brisbane
Australia
+61 7 3864 2051 (Phone)
+61 7 3864 1299 (Fax)

HOME PAGE: http://www.qut.edu.au/ph_server_query.do

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