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An ecological theory of population-level organizational diversity

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  • Boone Ch.
  • Wezel F.C.
  • Van Witteloostuijn A.
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    Abstract

    The 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 Info

    Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2007003.

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    Length: 74 pages
    Date of creation: Oct 2006
    Date of revision:
    Handle: RePEc:ant:wpaper:2007003

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    Postal: Prinsstraat 13, B-2000 Antwerpen
    Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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    1. Christophe Boone & Arjen van Witteloostuijn, 2004. "A unified theory of market partitioning: an integration of resource-partitioning and sunk cost theories," Industrial and Corporate Change, Oxford University Press, vol. 13(5), pages 701-725, October.
    2. Zoltan Acs & Catherine Armington, 2004. "Employment Growth and Entrepreneurial Activity in Cities," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 911-927.
    3. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
    4. Christophe Boone & Glenn R. Carroll & Arjen van Witteloostuijn, 2004. "Size, differentiation and the performance of Dutch daily newspapers," Industrial and Corporate Change, Oxford University Press, vol. 13(1), pages 117-148, February.
    5. Kaiser, Ulrich, 2002. "Measuring knowledge spillovers in manufacturing and services: an empirical assessment of alternative approaches," Research Policy, Elsevier, vol. 31(1), pages 125-144, January.
    6. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
    7. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
    8. Caves, R E & Porter, M E, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, MIT Press, vol. 91(2), pages 241-61, May.
    9. van Witteloostuijn, Arjen & van Wegberg, Marc, 1992. "Multimarket competition : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 18(2), pages 273-282, July.
    10. Peli, Gabor & Nooteboom, Bart, 1997. "Market partitioning and the geometry of the resource space," Research Report 97B40, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    11. Witteloostuijn, A. van & Wegberg, M.J.A.M., 1992. "Multimarket competition: Theory and evidence," Open Access publications from Tilburg University urn:nbn:nl:ui:12-5373408, Tilburg University.
    12. José Mata & Pedro Portugal, 2001. "The Survival of New Domestic and Foreign Owned Firms," Working Papers w200101, Banco de Portugal, Economics and Research Department.
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