ABSTRACT
This chapter concerns theories and empirical evidence relating explicitly to corporate growth. It discusses the creation of the underlying conceptual framework is traced through the work of Downie J, Penrose E. T and Marris R, and each of their contributions is assessed. The chapter discusses the basic structure of the family of models comprising the 'economic' theory of the growth of the firm is set out, and some developments are considered. It discusses the empirical work on the relationships between growth, profitability and size, which are the key variables isolated by the theory, is reviewed, and the phenomenon of takeovers is examined in order to throw light on the nature of stock market discipline. Although not the principal subject of this chapter, size must be included in any empirical consideration of the relationship between growth and profitability since the absolute size of the firm may have an independent influence on these, and other, aspects of behaviour and performance.
