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Organic and acquisitive growth: Re-examining, testing and extending Penrose’s growth theory
Nottingham University Business School.
Jönköping University, Jönköping International Business School, JIBS, ESOL (Entrepreneurship, Strategy, Organization, Leadership). Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Jönköping University, Jönköping International Business School, JIBS, ESOL (Entrepreneurship, Strategy, Organization, Leadership). Jönköping University, Jönköping International Business School, JIBS, Business Administration.
Nottingham University Business School.
2011 (English)In: Journal of Management Studies, ISSN 0022-2380, E-ISSN 1467-6486, Vol. 48, no 1, 48-74 p.Article in journal (Refereed) Published
Abstract [en]

Edith Penrose's theory of firm growth postulates that a firm's current growth rate will be influenced by the adjustment costs of, and changes to a firm's productive opportunity set arising from, previous growth. Although she explicitly considered the effect of previous organic growth on current organic growth, she was largely silent about the effect of previous acquisitive growth. In this paper we extend Penrose's work to examine how previous rates of organic and acquisitive growth influence current organic growth. Employing a panel of Swedish firms over a 10-year period, our results suggest the following. First, previous organic growth acts as a constraint on current organic growth. Second, previous acquisitive growth has a positive effect on current organic growth. We conclude that organic growth and acquisitive growth constitute two distinct strategic options facing the firm, which have a differential impact on the future organic growth of the firm.

Place, publisher, year, edition, pages
2011. Vol. 48, no 1, 48-74 p.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-17458DOI: 10.1111/j.1467-6486.2009.00879.xOAI: oai:DiVA.org:hj-17458DiVA: diva2:484630
Available from: 2012-01-27 Created: 2012-01-27 Last updated: 2013-01-18Bibliographically approved

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