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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.

Suggested Citation

  • Guido Buenstorf & Ulrich Witt, 2006. "How Problems of Organisational Growth in Firms Affect Industry Entry and Exit," Revue de l'OFCE, Presses de Sciences-Po, vol. 97(5), pages 47-62.
    • Handle: RePEc:cai:reofsp:reof_073_62
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    References listed on IDEAS

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    3. Guido Buenstorf, 2007. "Evolution on the Shoulders of Giants: Entrepreneurship and Firm Survival in the German Laser Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 30(3), pages 179-202, May.
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    10. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 725-760, August.
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    Cited by:

    1. Guido Buenstorf, 2007. "Creation and Pursuit of Entrepreneurial Opportunities: An Evolutionary Economics Perspective," Small Business Economics, Springer, vol. 28(4), pages 323-337, April.
    2. Nathalie Lazaric, 2012. "Evolution of Individual and Organizational Knowledge: Exploring Some Motivational Triggers Enabling Change," Chapters, in: Richard Arena & Agnès Festré & Nathalie Lazaric (ed.), Handbook of Knowledge and Economics, chapter 21, Edward Elgar Publishing.
    3. Richard Arena & Agnès Festré & Nathalie Lazaric (ed.), 2012. "Handbook of Knowledge and Economics," Books, Edward Elgar Publishing, number 3101.

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    More about this item

    Keywords

    entry; exit; growth of firms over the industry life cycle; spinoff and diversification;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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