A Survey of Theories and Empirical Evidence
New Perspectives on the Modern Corporation series
Chapter 11: Conclusion
What have we learned about firm growth? To conclude this book, we begin by reviewing the main themes encountered (section 11.1) and make some final comments concerning theoretical (section 11.2) and empirical (section 11.3) work. Section 11.4 concludes with a synthetic discussion about the nature of firm growth, guided by the main findings of the book. 11.1 TAKING STOCK Chief among the characteristics of firm growth rates, it would appear, is that firm growth rates are remarkably idiosyncratic and that it is quite difficult to generalize across the growth experiences of firms. It may well be that, after reading this book, both the econometrician and the theorist feel like tearing their clothes in frustration and wailing ‘random, utterly random, everything is random!’ Although the random element is indeed prevalent, it is nonetheless possible to find ways of identifying new regularities. This can be achieved by applying well thought-out statistical techniques whilst using an appropriate theoretical framework that pays special attention to the context to which they are applied. In any case, we believe that growth rates are not so random that there is no point in looking at them. We began the book by looking at the distributions of firm size, firm age and firm growth in Chapters 2 and 3, before moving on to consider the results of regressions that had sought to reveal the determinants of firm growth (Chapters 4 to 7). One of the main results that emerged from this literature, however, was that firm growth...
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