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

Author

Listed:
  • 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

    as
    1. Guido Buenstorf & Steven Klepper, 2009. "Heritage and Agglomeration: The Akron Tyre Cluster Revisited," Economic Journal, Royal Economic Society, vol. 119(537), pages 705-733, April.
    2. 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.
    3. Witt, Ulrich, 1998. "Imagination and leadership - The neglected dimension of an evolutionary theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 35(2), pages 161-177, April.
    4. Ziegler, Charles A., 1985. "Innovation and the imitative entrepreneur," Journal of Economic Behavior & Organization, Elsevier, vol. 6(2), pages 103-121, June.
    5. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
    6. Panzar, John C & Willig, Robert D, 1981. "Economies of Scope," American Economic Review, American Economic Association, vol. 71(2), pages 268-272, May.
    7. 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 733-755, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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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.

    More about this item

    Keywords

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

    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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