Managerial intensity, firm size and growth

Thirty years ago Edith Penrose proposed that managerial resources will grow at a rate somewhat faster than that of the size of the firm. With available data, the Penrose Hypothesis and an alternative steady‐state hypothesis are tested, using simple econometric models involving managerial intensity, firm (industry) size and growth. The steady‐state hypothesis is accepted for the recent data and the Penrose Hypothesis is accepted for the earlier data. Policy issues are then discussed.