Understanding the sources of business growth is central to both the fields of entrepreneurship and strategy. This is a logical endeavor given the positive macro-level outcomes of firm growth, such as the creation of new jobs, an increase in tax revenues, the provision of innovations, and overall...

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...