ABSTRACT
This chapter is concerned with the causes of and limits to the growth of firms. There are two approaches to the question of the size of firms. The traditional approach attempts to explain size in terms of the balance of advantages and disadvantages of being a particular size. Another approach emphasizes the process of growth and treats size as a more or less incidental result of a continuous on-going or ‘unfolding’ process. There is one type of productive service which, by its very nature, is available to a firm in only limited amounts. This is the service of personnel, in particular of management, with experience within the firm. The managerial services available may be highly specific to the firm’s existing products, but this makes it all the easier to expand as unused services develop, provided that additional goods can be sold at profitable prices.
