The growth of “connected” firms: A re-appraisal of Penrosian theory and its application to artisanal firms operating in contemporary business networks

Abstract

The thesis is concerned with the growth of ‘connected’ firms, characterised as small firms that are engaged in stable spatial and vertical network relationships, involving a variety of actors, including larger firms. It locates these firms within the landscape of the ‘New Competition’, (Best 1990, 2001), highlighting the relatively unexplored region occupied by connected artisanal firms. The literature review is constructed around a detailed re-appraisal of Edith Penrose’s (1959) study, The Theory of the Growth of the Firm, which traces its antecedents, re-constructs its interconnections and calibrates its explanatory potential against the work of contemporaries, successors and opponents. The review provides the basis for development of a modified Penrosian framework, designed to embrace a multi-level analysis of growth processes that span the ‘blurred boundaries’ of the connected firm. An empirical study of the growth of connected artisanal firms demonstrates the application of this modified framework. The study is presented in the form of an analytically structured narrative, illustrated by network mapping sequences and informed by a qualified critical realist perspective. The final chapters reflect on the theoretical, methodological and practical policy implications of the study, highlighting the broader implications for researching the growth of other forms of connected firm.