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How Problems of Organisational Growth in Firms Affect Industry Entry and Exit

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  • Guido Buenstorf
  • Ulrich Witt

Abstract

Many newly emerging industries show similar patterns of development regarding entry and exit dynamics. This paper argues that several features of exit and new entry into industries through diversification and spinoff formation can be related to problems arising within firms when their organizations grow during the industry?s life cycle. Drawing on earlier work, the growth-induced learning and coordination problems of the firms are outlined and their impact at the industry level is discussed. JEL Classification: L25, L59, O31.

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Bibliographic Info

Article provided by Presses de Sciences-Po in its journal Revue de l'OFCE.

Volume (Year): 97 bis (2006)
Issue (Month): 5 ()
Pages: 47-62

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Handle: RePEc:cai:reofsp:reof_073_62

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Web page: http://www.cairn.info/revue-de-l-ofce.htm

Related research

Keywords: entry; exit; growth of firms over the industry life cycle; spinoff and diversification;

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References

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  1. Guido Buenstorf & Steven Klepper, 2009. "Heritage and Agglomeration: The Akron Tyre Cluster Revisited," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 119(537), pages 705-733, 04.
  2. Peter Thompson, 2005. "Selection and Firm Survival: Evidence from the Shipbuilding Industry, 1825-1914," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 26-36, February.
  3. Guido Buenstorf, 2006. "Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry," Papers on Economics and Evolution 2005-20, Philipps University Marburg, Department of Geography.
  4. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 1(3), pages 223-247, September.
  5. repec:cup:cbooks:9780521813297 is not listed on IDEAS
  6. Witt, Ulrich, 2000. "Changing Cognitive Frames--Changing Organizational Forms: An Entrepreneurial Theory of Organizational Development," Industrial and Corporate Change, Oxford University Press, vol. 9(4), pages 733-55, December.
  7. Panzar, John C & Willig, Robert D, 1981. "Economies of Scope," American Economic Review, American Economic Association, American Economic Association, vol. 71(2), pages 268-72, May.
  8. Witt, Ulrich, 1998. "Imagination and leadership - The neglected dimension of an evolutionary theory of the firm," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 35(2), pages 161-177, April.
  9. Ziegler, Charles A., 1985. "Innovation and the imitative entrepreneur," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 6(2), pages 103-121, June.
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Cited by:
  1. Guido Buenstorf, 2007. "Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective," Small Business Economics, Springer, Springer, vol. 28(4), pages 323-337, April.

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