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In what sense do firms evolve?

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  • Bart Nooteboom

Abstract

Does evolutionary theory help, for a theory of the firm, or, more widely, a theory of organization? In this paper I argue that it does, to some but also limited extent. Evolutionary theories of economies, and of culture, have acquired considerable following, but have also been subject to considerable criticism. Most criticism has been aimed at inappropriate biological analogies, but recently it has been claimed that a 'universal Darwinism', purged of all such mistaken analogy, is both useful and viable. Why should we try to preserve evolutionary theory, and will such theory stand up to sustained critical analysis? How useful is it for theory of the firm? Evolutionary theory appears to be the most adequate theory around for solving the problem of agency and structure, avoiding both an overly rational, managerial 'strategic choice' view of organizations and a 'contingency' view of organizations as fully determined by their environment. Whether universal Darwinism stands up to critical analysis remains to be seen. Here, the focus is on evolutionary theory of organization and of knowledge. Use is made of a constructivist 'embodied cognition' view of cognition and of elements of a cognitive theory of the firm.

Suggested Citation

  • Bart Nooteboom, 2008. "In what sense do firms evolve?," Papers on Economics and Evolution 2008-12, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2008-12
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    References listed on IDEAS

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    1. Wuyts, Stefan & Colombo, Massimo G. & Dutta, Shantanu & Nooteboom, Bart, 2005. "Empirical tests of optimal cognitive distance," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 277-302, October.
    2. Ulrich Witt, 2004. "On the proper interpretation of 'evolution' in economics and its implications for production theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(2), pages 125-146.
    3. U. Witt, 2003. "The Evolutionary Perspective on Organizational Change and the Theory of the Firm," Papers on Economics and Evolution 2003-07, Philipps University Marburg, Department of Geography.
    4. Geoffrey M. Hodgson, 2002. "Darwinism in economics: from analogy to ontology," Journal of Evolutionary Economics, Springer, vol. 12(3), pages 259-281.
    5. Geoffrey Hodgson, 2002. "The Legal Nature of the Firm and the Myth of the Firm-Market Hybrid," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 37-60.
    6. Nooteboom, Bart & Van Haverbeke, Wim & Duysters, Geert & Gilsing, Victor & van den Oord, Ad, 2007. "Optimal cognitive distance and absorptive capacity," Research Policy, Elsevier, vol. 36(7), pages 1016-1034, September.
    7. Richard Nelson, 2008. "Economic Development from the Perspective of Evolutionary Economic Theory," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 9-21.
    8. Hodgson, Geoffrey M. & Knudsen, Thorbjorn, 2006. "Why we need a generalized Darwinism, and why generalized Darwinism is not enough," Journal of Economic Behavior & Organization, Elsevier, vol. 61(1), pages 1-19, September.
    9. G. Hodgson., 2007. "What Are Institutions?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 8.
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    Cited by:

    1. Dhaoui, Elwardi, 2012. "Cognitive Capitalism: Foundations, Assessment and Evaluation of New Perspectives," MPRA Paper 63688, University Library of Munich, Germany.

    More about this item

    Keywords

    Length 33 pages;

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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