2005
DOI: 10.1002/mde.1212
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Examining the Penrose effect in an international business context: the dynamics of Japanese firm growth in US industries

Abstract: Penrose (1959) theoretically developed the research proposition that the finite capacities of a firm's internally experienced managers limit the rate at which the firm can grow in a given period of time. One empirical implication that follows logically from this line of reasoning is that a fast-growing firm will eventually slow down its growth in the subsequent time period because its firm-specific management team, which is posited to be inelastic at least in the short run, is unable to handle effectively the … Show more

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Cited by 96 publications
(101 citation statements)
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References 57 publications
(97 reference statements)
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“…In general, these research studies provide supportive, but not robust empirical evidence for the Penrose Effect, and the strength of the Penrose Effect varies with the types of expansion, and the firms considered in the samples (Tan and Mahoney, 2005).…”
mentioning
confidence: 85%
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“…In general, these research studies provide supportive, but not robust empirical evidence for the Penrose Effect, and the strength of the Penrose Effect varies with the types of expansion, and the firms considered in the samples (Tan and Mahoney, 2005).…”
mentioning
confidence: 85%
“…Shen (1970) suggests that if not for managerial constraints, growth rates of successive periods would be positively correlated because larger firms enjoy increasing returns to scale for labor (p.706) and can benefit more from technological change (p.707 footnote) and therefore can grow faster. Tan and Mahoney (2005) suggest that it might be possible for firms to achieve growth in successive periods in foreign markets because the need for close coordination between overseas operations may be lower than between domestic ones. Our empirical results indicate that the correlation coefficient between PREGROW and GROWTH is not statistically significant at the 0.05 level in Table 1.…”
Section: About Here -----------------------------------------mentioning
confidence: 99%
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“…What is the long run? Answers to these questions depend on a firm's pace of growth (Tan & Mahoney, 2005) and capabilities to adapt to a new institutional system (Peng et al, 2005: 630-631). We therefore cannot predict directly how short the short run is or how long the long run is.…”
Section: Cross-listing and The Product Scope Of The Firmmentioning
confidence: 99%