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Modelling the Growth of Corporations

Applications for Managerial Techniques and Portfolio Analysis

Modelling the Growth of Corporations
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US$ 115.00 (+ tax)
Understanding and quantifying the processes that generate long-run growth of productivity within corporations can play a vital role in the assessment of management and investment strategies. This book develops an approach for analysing and modelling the productivity growth of individual corporations.

The authors develop a practical empirical model of corporate productivity growth and apply it to data for a range of companies in the chemicals, pharmaceuticals and engineering industries. The model demonstrates how concentration upon the long-run trend in growth is helpful in evaluating management strategies and in assessing performance of firms before and after a merger. The trend growth of productivity is shown to be strongly linked with the growth of profitability and in turn with stock market valuation.

The modern corporation is complex, and evolves through self-organisation, its structure changing in response to accumulated experience within the firm and the surrounding environment. This book shows that continuous growth is the outcome of this evolving process and that the magnitude of growth is determined by the corporate culture that exists within the firm. Corporate culture dictates whether innovation and learning processes, the main sources of long-term productivity growth, are allowed to flourish within the firm.

The model is explained in clear and non-technical terms, and is backed up by full mathematical proofs in an appendix. The authors use their diversity of experience from the business, academic and policy sectors to demonstrate a range of applications for their model.

Modelling the Growth of Corporations contributes to the analysis and evaluation of firm performance and provides a useful tool for those involved in making strategic decisions within corporations and also those making decisions on how to allocate portfolio investment funds.
Palgrave Macmillan Ltd.; August 2001
141 pages; ISBN 9781403907592
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