The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Internal Economies

  • G. Becattini
Reference work entry


Marshall introduced the idea of ‘internal’ economies, which accompany the growth of the ‘individual representative firm’, as opposed to the ‘external’ economies accompanying the growth of ‘a national or a local industry’. In principle the pursuit of internal economies would lead to a world composed of firms each one producing a great share of a very small range of commodities. But while Marshall shared the classical view of an increasing average size of the business unit, he put it into a dynamical and historical context. Tendencies and countertendencies may result in different outcomes in terms of market structures.


Concentration External economies Internal economies Market structure Marshall, A. Mechanization 

JEL Classifications

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  1. Jenner, R.A. 1964. The dynamic factor in Marshall’s economic system. Western Economic Journal 3 (1): 21–38.Google Scholar
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  3. Marshall, A. 1890. Principles of economics, ed. C.W. Guillebaud. 9th (Variorum) edn, 2 vols. London: Macmillan, 1961.Google Scholar
  4. Marshall, A. 1919. Industry and trade. London: Macmillan.Google Scholar

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • G. Becattini
    • 1
  1. 1.