Management International Review

, Volume 47, Issue 2, pp 151-173

First online:

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

  • Peter J. BuckleyAffiliated withUniversity of Leeds
  • , Mark CassonAffiliated withCentre for Institutional Performance, University of Reading

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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.

Key words

Internationalization Multinational Firms Global Strategic Management Edith Penrose Foreign Market Entry Product Diversification