Edith Penrose’s ‘The Theory of the Growth of the Firm’ Fifty Years Later

Abstract

We revisit and critically assess the contribution of Edith Penrose’s classic book “The Theory of the Growth of the Firm” in economics and management scholarship, on occasion of its fiftieth anniversary and the publication of its fourth edition. We revisit an earlier claim of ours that the main idea of the book is proving to be one of the most influential of the second part of the twentieth century, on the basis of new scholarly contributions. We claim that in addition to supporting our earlier suggestion, ideas inspired from Penrose’s book are now branching out to fields such as entrepreneurship, strategic human resource management and further afield. This renders the possibility of the book keep being very influential in the foreseeable future a very real one. We also point to some limitations of the book (notably the absence of intra-firm conflict) and the possibility for extensions, to include syntheses with other perspectives, notably the behavioral.

Keywords: Penrose, Theory of the Firm, Growth

JEL Classification: L21, L25