Penrose and the growth of multinational firms

Kay, Neil (2005) Penrose and the growth of multinational firms. Managerial and Decision Economics, 26 (2). pp. 99-112. ISSN 1099-1468 (

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In this paper, we look at the relationship of Penrose's theory of the growth of the firm to the multinational enterprise. We argue that one element in exploring the nature and evolution of the MNE may lie in asking the question; ‘what was there before there was the MNE?’ The answer to this may lie in examining corporate growth processes and the evolution of large firms through internal growth and external growth. By placing the MNE in the broader context of Penrosian growth processes, it may be possible to develop a fuller analysis of the globalisation of economic activity. We also argue that the potential benefits from pursuing such possible links may not just be limited to work in the international business field. By developing an approach to the multinational based on such foundations, it may be possible to contribute to understanding and analysis in areas (such as corporate growth) that have been traditionally regarded as the preserve of the industrial organisation theorists, but which have been relatively neglected by them in recent years.