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Edith Penrose’s Theory of the Growth of the Firm and the strategic management of multinational enterprises

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  • Peter J. Buckley

    (University of Leeds)

  • Mark Casson

    (University of Reading)

Abstract

and Key Results This paper provides a formal model of Edith Penrose’s Theory of the Growth of the Firm which has important implications for the strategy of multinational enterprises. The model provides an analysis of the trade-off between product diversification and foreign market penetration. It also can account for the speed of entry into foreign markets. Formalizing Penrose’s Theory of the Growth of the Firm provides an account of internationalization incorporating geographical expansion patterns, sequential decision making and learning.

Suggested Citation

  • Peter J. Buckley & Mark Casson, 2007. "Edith Penrose’s Theory of the Growth of the Firm and the strategic management of multinational enterprises," Management International Review, Springer, vol. 47(2), pages 151-173, March.
    • Handle: RePEc:spr:manint:v:47:y:2007:i:2:d:10.1007_s11575-007-0009-1
    DOI: 10.1007/s11575-007-0009-1
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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. 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.
    5. 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).
    6. 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.
    7. Patrick Regnér & Udo Zander, 2011. "Knowledge and Strategy Creation in Multinational Companies," Management International Review, Springer, vol. 51(6), pages 821-850, December.
    8. Pattit, Jason M. & Pattit, Katherina G. & Spender, J C, 2021. "Edith T. Penrose: Economist of "The Ordinary Business of Life"," MPRA Paper 106375, University Library of Munich, Germany.
    9. Kano, Hirokazu, 2023. "Early internationalization and subsequent geographic expansion: An extended Penrosean perspective," International Business Review, Elsevier, vol. 32(1).
    10. Shameen Prashantham & Stephen Young, 2011. "Post–Entry Speed of International New Ventures," Entrepreneurship Theory and Practice, , vol. 35(2), pages 275-292, March.
    11. Johan Karlsson, 2021. "Firm size and growth barriers: a data-driven approach," Small Business Economics, Springer, vol. 57(3), pages 1319-1338, October.
    12. 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.
    13. 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.
    14. 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.
    15. Peter J. Buckley, 2011. "International Integration and Coordination in the Global Factory," Management International Review, Springer, vol. 51(2), pages 269-283, April.
    16. 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.
    17. 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.
    18. 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.
    19. 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.

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