Abstract
Fifty years ago Penrose (1959) proposed that a firmiÂĶs growth is hard to sustain because of existing managementiÂĶs finite capacities and bounded capabilities. The Penrose hypothesis regarding managerial constraints on a firmiÂĶs sustained growth has been noted as the Penrose effect. This research reinvestigates the Penrose effect by relaxing PenroseiÂĶs (1959) assumption of existing managementiÂĶs bounded capabilities. We proposed that top management teamiÂĶs diversified experiences, in terms of industry, function, and educational backgrounds, facilitate endogenous managerial learning in dealing with complexity associated the growth and thus mitigate the occurrence of the Penrose effect. We also argued that top management teamiÂĶs team-specific experience affects managerial learning efficiency and thus impact the growth of a firm. Using a sample of manufacturers in an emerging economy, we tested empirically our proposal. The results indicate that top management teamiÂĶs experience heterogeneity does not signifi...
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