An Introduction to Theories of Corporate Growth
In recent years, economic analysis of advanced capitalist economies has paid increasing attention to the nature and determinants of the forces governing the size and growth of the corporations of which they are composed. Macro-economic models, describing the growth rate of the system as a whole, of course go back more than a quarter of a century (or much further if the contributions of the classical nineteenth-century writers are included), but most of these theories have left open the question of whether we should best see the growth of the system as a direct aggregation of the growth of the parts, or whether the parts mainly respond passively to underlying forces pervading the whole. More generally, ‘macro-’ and ‘micro-’ theory in this area have not been very well integrated, and the typical general model of the modern economy often appears almost indifferent to widely differing interpretations of the corporate function.
KeywordsInterest Rate Initial Size Demand Curve Marginal Revenue Retention Ratio
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