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.