Chapter

‘Inherited’ Resources and the Direction of Expansion

Edith Penrose

in The Theory of the Growth of the Firm

Third edition

Published in print September 1995 | ISBN: 9780198289777
Published online November 2003 | e-ISBN: 9780191596759 | DOI: http://dx.doi.org/10.1093/0198289774.003.0005
 ‘Inherited’ Resources and the Direction of Expansion

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This chapter examines the internal factors affecting the direction of expansion of firms. Internal obstacles arise when specialised services required for expansion in a particular direction are insufficient within the firm. Internal inducements arise from the existence of a pool of unused productive services, resources, and special knowledge. The reasons why there will always be unused productive services within a firm, and the significance of the existence of such services for ‘external’ opportunities for expansion are discussed.

Keywords: firms; expansion; internal obstacles; resources; services

Chapter.  10343 words. 

Subjects: Microeconomics

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