Organic and acquisitive employment growth : re-examining,testing and extending Penrose's Growth Theory.

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 impact of previous organic growth on current organic growth, she was largely silent about the impact of previous acquisitive growth. In this paper we extend Penrose’s work to examine that the relative impact of organic and acquisitive growth on the adjustment costs and productive opportunity set of the firm. Employing a panel of commercially active enterprises in Sweden over a 10 year period our results suggest the following. First, previous organic growth acts as a constraint on current organic growth. Second, previous acquisitive growth has a positive effect on current organic growth. We conclude that organic growth and acquisitive growth constitute two distinct strategic options facing the firm, which have a differential impact on the future organic growth of the firm.

Organic and acquisitive growth : re-examining, testing and extending Penrose’s growth theory

The Theory of the Growth of The Firm by Edith Penrose, first published in 1959, is a seminal contribution to the field of management. Penrose's intention was to create a theory of firm growth which was logically consistent and empirically tractable (Buckley and Casson, 2007). Much attention, however, has been focused on her unintended contribution to the resource-based view (henceforth RBV) (e.g. Kor and Mahoney, 2004; Lockett and Thompson, 2004) rather than her firm growth theory. We feel that this is unfortunate because despite a rapidly growing body of empirical work, conceptual advancement in growth studies has been limited (Davidsson and Wiklund, 2000; Davidsson et ai., 2006; Delmar, 1997; Storey, 1994). The growth literature frequently references Penrose's work, but little explicit testing of her ideas has been undertaken. This is surprising given that Penrose's work remains the most comprehensive theory of growth to date. One explanation is that she did not formality present her arguments, favouring verbal exposition over formalized models (Lockett, 2005; Lockett and Thompson, 2004). However, the central propositions and conclusions of her theory can be operationalized and empirically tested.

To save or to consume: linking growth theory with the Keynesian model

In the neoclassical growth theory, higher saving rate gives rise to higher output per capita. However, in the Keynesian model, higher saving rate causes lower consumption, which may lead to a recession. Students may ask, “Should we save or should we consume?” In most of the macroeconomics textbooks, economic growth and Keynesian economics are in separate, sometimes unsequential, chapters. The connection between the short run and the long run is not apparent. The author builds a bridge between the neoclassical growth theory and the Keynesian model. He links the Solow diagram and the IS-LM curves and depicts the short-run to long-run transition of the economy after changes in saving and other macroeconomic policies.

Demand- side resistance to creative destruction in schumpeterian growth theory

The Schumpelerian model of endogeno~s growlh is generalized with lhe introduction of stochastic resislance. by agenls other Ihan producers. to lhe innovations which drive growth. This causes a queue to be formcd of innovations, alrcady discovered, bUI waiting to be adopled~ A slationary stochastic equilibrium (SSE) is obtained when the queue is stable~ It is shown that in the SSE, such resistance will always reduce lhe average growth iate hut it may increa~e wclfare in certain silualions. In an example, Ihis is when innovatiuns are small anti monopoly power great. The cont1icl hetween this welfare motive for resistance and those of rent-seeking innovalors.may well explain why growth rates differ.

The economics of demand-led growth: theory and evidence for Brazil

Includes bibliography

The effect of life expectancy on fertility, saving, schooling and economic growth: theory and evidence

We construct a simple growth model where agents with uncertain survival choose schooling time, life-cycle consumption and the number of children. We show that rising longevity reduces fertility but raises saving, schooling time and the growth rate at a diminishing rate. Cross-section analyses using data from 76 countries support these propositions: life expectancy has a significant positive effect on the saving rate, secondary school enrollment and growth but a significant negative effect on fertility. Through sensitivity analyses, the effect on the saving rate is inconclusive, while the effects on the other variables are robust and consistent. These estimated effects are decreasing in life expectancy. Copyright The editors of the Scandinavian Journal of Economics 2005.

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth

What does endogenous growth theory tell about regional economies? Empirics of R&D worker-based productivity growth, Regional Studies. Endogenous growth theory emerged in the 1990s as ‘new growth theory’ accounting for technical progress in the growth process. This paper examines the role of research and development (R&D) workers underlying the Romer model (1990) and its subsequent modifications, and compares it with a model based on the accumulation of human capital engaged in R&D. Cross-section estimates of the models against productivity growth of European regions in the 1990s suggest that each R&D worker has a unique set of knowledge while his/her contributions are enhanced by knowledge sharing within a region as well as spillovers from other regions in proximity.

Governance regimes, corruption and growth: theory and evidence

We study the role of political accountability as a determinant of corruption and economic growth. Our model identifies two governance regimes defined by the quality of political institutions and shows that the relationship between corruption and growth is regime specific. We use a threshold model to estimate the impact of corruption on growth where corruption is treated as an endogenous variable. We find two governance regimes, conditional on the quality of political institutions. In the regime with high quality political institutions, corruption has a substantial negative impact on growth. In the regime with low quality institutions, corruption has no impact on growth.

Do developing economies require creative industries? Some old theory about new China.

This paper argues that media and communications theory, as with cultural and creative industries analysis, can benefit from a deeper understanding of economic growth theory. Economic growth theory is elucidated in the context of both cultural and media studies and with respect to modern Chinese economic development. Economic growth is a complex evolutionary process that is tightly integrated with socio-cultural and political processes. This paper seeks to explore this mechanism and to advance cultural theory from an erstwhile political economy perspective to one centred about the co-evolutionary dynamics of economic and socio-political systems. A generic model is presented in which economic and social systems co-evolve through the origination, adoption and retention of new ideas, and in which the creative industries are a key part of this process. The paper concludes that digital media capabilities are a primary source of economic development.

Methane hydrate growth velocity in seepage system of Qiongdongnan Basin, South China Sea

The occurrences of diapirs, gas-filled zones and gas plumes in seawater in Qiongdongnan Basin of South China Sea indicate that there may exist seepage system gas-hydrate reservoirs. Assuming there has a methane venting zone of 1500 m in diameter, and the methane flux is 1000 kmol/a, and the temperature of methane hydrate-bearing sediments ranges from 3 degrees C to 20 degrees C, then according to the hydrate film growth theory, by numerical simulation, this paper computes the temperatures and velocities in 0 mbsf, 100 mbsf, 200 mbsf, 425 mbsf over discrete length, and gives the change charts. The results show that the cementation velocity in sediments matrix of methane hydrate is about 0.2 nm/s, and the seepage system will evolve into diffusion system over probably 35000 years. Meanwhile, the methane hydrate growth velocity in leakage system is 20 similar to 40 times faster than in diffusion system.

The new concepts and new developments in hte theory of polymer crystallization

Recently a debate about the initial crystallization process which has not been the hotspot for a long time since the theory proposed by Hoffman- Lauritzen (LH) dominated the field arose again. For a long time the Hoffman-Lauritzen model was always confronted by criticism,and some of the points were taken up and led to modifications, but the foundation remained unchanged which deemed that before the nucleation and crystallization the system was uniform. In this article the classical nucleation and growth theory of polymer crystallization was reviewed, and the confusion of the explanations to the polymer crystallization phenomenon was pointed out. LH theory assumes that the growth of lamellae is by the direct attachment of chain sequences from the melt onto smooth lateral sides.

Verification of McCabe's Delta L Law for Growth of Lysozyme Crystals by Hanging Drop Method

Lysozyme is a naturally occurring enzyme in egg white and has high commercial importance due to its antimicrobial properties. The main objective of this work was to study the growth rate of lysozyme crystals isolated from egg for the first 72 hours and verify the results with McCabe’s constant crystal growth theory. Hanging drop crystallization method was used to form high purity lysozyme crystals from the embryonic stage. To this end, this work differs from an earlier work of Forsythe et al., who used seed crystals in the size range of 10 µm - 40 µm for face growth measurements at different pH values. The maximum crystal size recorded in the present work was 392.86 µm, which is within the typical size range of 50 µm - 500 µm for which constant crystal growth is expected to hold according to McCabe’s ?L law. Electron micrographs (SEM) revealed the structure and dimensions of the crystals while SDS-Page was used to measure the purity of the crystals. The SEM results showed that that lysozyme growth rate was linear and agreed with McCabe’s constant growth theory, producing a growth rate of 1.77 x 10-3 µm .s-1

An investigation into differences between indoleacetic acid and fusicoccin in their influence on RNA synthesis, protein synthesis and growth in Avena coleoptile tissue

Growth stimulation of Avena coleoptile tissue by indoleacetic acid (IAA) and fusicoccin (FC) was compared by measuring both their influence on RNA and protein synthesis during IAA or FC stimulated growth. FC stimulated growth more than IAA during the initial four hour exposure, after which the growth rate gradually declined to the control rate. FC, but not IAA, increased the uptake of 3H-Ieucine into tissue and the specific radioactivity of extracted protein. Cycloheximide inhibited the incorporation of 3H-Ieucine into protein by approximately 60% to 70% in all cases. In the presence of cycloheximide 3H-radioactivity accumulated in FC-treated tissue, whereas IAA did not seem to influence 3H-accumulation. These results suggest that FC stimulated leucine uptake into the tissue and that increased specific activity of coleoptile protein is due to increased leucine uptake, not an increased rate of protein synthesis. There was no measurable influence of IAA and/or FC on RNA and protein synthesis during the initial hours of a growth stimulation. Inhibitors of RNA and protein synthesis, actinomycin D and cycloheximide, respectively, severely inhibited IAA enhanced growth but only partially inhibited FC stimulated growth. The data are consistent with suggestions that a rapidly turning over protein participates in IAA stimulated growth, and that a continual synthesis of RNA and proteins is an absolute requirement for a long term growth response to IAA. On the contrary, FC-stimulated growth exhibited less dependency on the transcription and translation processes. The data are consistent with proposals suggesting different sites of action for FC and IAA stimulated growth. l?hen compared to CO2-free air, CO2 at 300 ppm had no significant influence on coleoptile growth and protein synthesis in the presence or absence of lAA or FC. Also, I mM malate, pH 6.0 did not influence growth of coleoptiles in the presence or absence of lAA. This result was obtained despite reports indicating that 300 ppm CO2 or I mM malate stimulates growth and protein synthesis. This lack of difference between CO2-treated and untreated tissue could indicate either that the interstitial space CO2 concentration is not actually different in the two treatments due to significant endogenous respiratory CO2 or else the data would suggest a very loose coupling between dark CO2 fixation and growth. IAA stimulated the in vivo fixation of 14c-bicarbonate (NaHI4c03) by about 25% and the addition of cycloheximide caused an inhibition of bicarbonate fixation within 30 min. Cycloheximide has also been reported to inhibit IAA-stimulated H+ excretion. These data are consistent with the acid growth theory and suggest that lAA stimulated growth involves dark CO2 fixation. The roles of dark CO2 fixation in lAA-stimulated growth are discussed.

Religion and Economic Growth: Was Weber Right?

Evidence of falling wages in Catholic cities and rising wages in Protestant cities between 1500 and 1750, during the spread of literacy in the vernacular, is inconsistent with most theoretical models of economic growth. In The Protestant Ethic, Weber suggested an alternative explanation based on culture. Here, a theoretical model confirms that a small change in the subjective cost of cooperating with strangers can generate a profound transformation in trading networks. In explaining urban growth in early-modern Europe, specifications compatible with human-capital versions of the neoclassical model and endogenous-growth theory are rejected in favor of a “small-world” formulation based on the Weber thesis.