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A Corporation's Culture as an Impetus for Spinoffs and a Driving Force of Industry Evolution

  • Christian Cordes

    ()

  • Peter J. Richerson
  • Georg Schwesinger

    ()

In infant industries, a great share of new market opportunities is depleted by firms that spinoff from incumbents. A model emphasizing the relation between incumbents' evolving corporate cultures and the generation of spinoffs explains this regularity in industry evolution. Organizations reach a critical size that entails the collapse of a cooperative culture and triggers the exodus of personnel founding own firms. Thereby, organizations with a cooperative culture active in a dynamic business environment provide ideal training grounds for potential founders. We relate our findings to empirical evidence on developmental patterns in industries, such as genealogies and performance of spinoffs.

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File URL: ftp://137.248.191.199/RePEc/esi/discussionpapers/2011-11.pdf
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Paper provided by Philipps University Marburg, Department of Geography in its series Papers on Economics and Evolution with number 2011-11.

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Date of creation: Aug 2011
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Handle: RePEc:esi:evopap:2011-11
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