Abstract

The year 2009 marked the 50th anniversary of Edith Penrose’s The Theory of the Growth of the Firm and saw the third edition of her now-classic book. Over the past twenty-five years or so, TGF has become a canonical reference to the currently dominant resource, knowledge, and capabilities-based approaches to business strategy, and to a lesser extent to the theory of the multinational enterprise, international business, and development scholarship. This article presents TGF’s ideas and assesses them critically. It discusses Penrose’s early contributions to economics, subsequent ideas in economics that are related to her book, the book’s contribution to organizational economics, business strategy, strategic human resource management, strategic entrepreneurship, recent debates on value creation and capture, and the political economy of globalization and development. The article also touches upon Penrose’s epistemology. Lastly, it outlines possible ways in which TGF can be generalized, critiqued, and integrated with other theories.