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The Growth of Firms, Competition and the Maturity of Industry

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Authors
Bloch, Harry
Finch, J.
Date
2005
Type
Conference Paper

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Bloch, Harry and Finch, John. 2005. The Growth of Firms, Competition and the Maturity of Industry, in Peter Kriesler (ed), The Fourth Australian Society of Heterodox Economists Conference, University of New South Wales, Dec 12 2005. The University of New South Wales, Sydney: The University of New South Wales.
Source Title
2005 Program and Papers
Source Conference
The Fourth Australian Society of Heterodox Economists Conference, University of New South Wales
Faculty
Curtin Business School
School of Economics and Finance
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Abstract

We develop a three-way categorization of capacity and its utilization covering micro, meso and macro framings, beginning with the approaches of Marshall, Steindl and Penrose. Within firms, we combine Steindl's analysis on fixed capital with Penrose's consideration of resources, including a higher-order form of capacity. We examine the implications of capacity expansion for competition and for the maturity of the industry, which reflects back on the value of the firm. We then argue that our higher-order concept of capacity can be made operational for empirical study by identifying a critical bottleneck that restrains firm growth at each point in its development.