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Organic Growth and Acquisitive Growth: Re-examining and Extending Penrose's Growth Theory

Lockett, Andy , Wiklund, Johan , & Davidsson, Per (2007) Organic Growth and Acquisitive Growth: Re-examining and Extending Penrose's Growth Theory. In Solomon, George (Ed.) Academy of Management 2007 Annual Meeting : Doing Well By Doing Good, 3 - 8 August 2007, Philadelphia, United States.

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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.

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ID Code: 12838
Item Type: Conference Paper
Additional Information: Access to the author-version is currently restricted pending permission from the publisher. For more information, please refer to the publisher’s website (see hypertext link) or contact the author.
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Keywords: Penros, Organic Growth, Acquisitive Growth
ISSN: 1543-8643
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Organisational Planning and Management (150312)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300)
Divisions: Current > Research Centres > Australian Centre for Business Research
Current > Research Centres > Australian Centre for Entrepreneurship
Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Management
Copyright Owner: Copyright 2007 Academy of Management
Deposited On: 03 Mar 2008
Last Modified: 11 Aug 2011 04:19

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