An ecological theory of population-level organizational diversity
AbstractThe question as to the evolution of population-level organizational diversity is at the heart of macro-level organizational sociology. However, the number of studies that direct this question explicitly is very limited, particularly in the empirical arena. We suggest a diversity-dependence theory that maps the macro-level evolution of organizational diversity with the micro-level events of entry and exit. We develop hypotheses as to the decision where to locate in product space by new entrants, as well as the likelihood of exit by incumbent firms given their location in product space. The key argument is that the micro-level entrants’ location decision and incumbents’ exit likelihood are both conditional upon macro-level organizational diversity, and that these events affect the evolution of population-level organizational diversity. Our hypotheses are tested in the British motorcycle industry in the 1895-1993 period, where we find support for our theory.
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Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2007003.
Length: 74 pages
Date of creation: Oct 2006
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-ENV-2007-10-20 (Environmental Economics)
- NEP-TID-2007-10-20 (Technology & Industrial Dynamics)
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