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Developing Shared Knowledge in Growing Firms

Author

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  • Hongyi Li

Abstract

I develop a theory of knowledge sharing in organizations where coordinated activity requires shared knowledge, and knowledge sharing is local and costly. Because knowledge sharing is local, knowledge diffuses gradually across an organization. Because knowledge sharing is costly, diffusion may stall, resulting in inefficiently fragmented knowledge. The theory suggests that excessively rapid organizational growth may result in fragmentation or in the abandonment of the organization’s early knowledge, and that these effects may persist in the long-run, even after the initial period of growth has ended. To avoid fragmentation, highly productive firms should deliberately constrain firm growth and avoid acquisition-based growth strategies. (JEL D21, D83, C73, J24)

Suggested Citation

  • Hongyi Li, 2017. "Developing Shared Knowledge in Growing Firms," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 33(2), pages 332-376.
    • Handle: RePEc:oup:jleorg:v:33:y:2017:i:2:p:332-376.
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    File URL: http://hdl.handle.net/10.1093/jleo/eww016
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    Citations

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    Cited by:

    1. Suraj Prasad & Marcus Tomaino, 2020. "Resources and culture in organizations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(4), pages 854-872, October.
    2. Kröger, Lars & Kuhnimhof, Tobias & Trommer, Stefan, 2019. "Does context matter? A comparative study modelling autonomous vehicle impact on travel behaviour for Germany and the USA," Transportation Research Part A: Policy and Practice, Elsevier, vol. 122(C), pages 146-161.

    More about this item

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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