Firms and Industries in Evolutionary Economics: Lessons from Marshall, Young, Steindl and Penrose

39 Pages Posted: 16 Jan 2014

See all articles by Harry Bloch

Harry Bloch

Curtin University of Technology - Curtin Business School - School of Economics and Finance

J. Finch

University of Aberdeen - Business School

Date Written: November 9, 2007

Abstract

Evolutionary economists have tended to assess firms and industries separately, neglecting the role of their interaction in the process of economic growth and development. We trace the separation of firms and industries to Marshall, whose industrial analysis by means of the representative firm formalizes population thinking as “thin” means of relating firms and industries. Penrose avoids the industry concept by focussing on heterogeneous firms, while Young and Steindl develop mundane explanations of firms’ relations within groups, locating the impetus for growth in a poorly understood environment. We conclude that evolutionary economics should revisit firms’ boundaries, not in the sense of explaining the existence of firms, but in a relating and communicating sense in which boundaries signify selective means of relations with others.

Keywords: firms, industries, Marshallian economics, external economies, firms’ boundaries

JEL Classification: B25, L14, 012

Suggested Citation

Bloch, Harry and Finch, J., Firms and Industries in Evolutionary Economics: Lessons from Marshall, Young, Steindl and Penrose (November 9, 2007). Available at SSRN: https://ssrn.com/abstract=2379923 or http://dx.doi.org/10.2139/ssrn.2379923

Harry Bloch (Contact Author)

Curtin University of Technology - Curtin Business School - School of Economics and Finance ( email )

Curtin University
GPO Box U 1987
Perth, 6845
Australia
+61 8 9266 2035 (Phone)
+61 8 9266 3026 (Fax)

J. Finch

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom

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