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An ecological theory of population-level organizational diversity

  • BOONE, Christophe
  • WEZEL, Filippo Carlo
  • VAN WITTELOOSTUIJN, Arjen
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    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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    Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2007003.

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    Length: 76 pages
    Date of creation: Mar 2006
    Date of revision:
    Handle: RePEc:ant:wpaper:2007003
    Contact details of provider: Postal: Prinsstraat 13, B-2000 Antwerpen
    Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/

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    1. José Mata & Pedro Portugal, 2001. "The Survival of New Domestic and Foreign Owned Firms," Working Papers w200101, Banco de Portugal, Economics and Research Department.
    2. 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.
    3. Zoltan J. Acs & Catherine Armington, 2004. "Employment Growth and Entrepreneurial Activity in Cities," Papers on Entrepreneurship, Growth and Public Policy 2004-13, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    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. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
    6. 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.
    7. 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.
    8. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-45, September.
    9. 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.
    10. 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.
    11. repec:dgr:rugsom:97b40 is not listed on IDEAS
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