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|Title:||A corporation's culture as an impetus for spinoffs and a driving force of industry evolution |
Richerson, Peter J.
|Issue Date:||2011 |
|Series/Report no.:||Papers on economics and evolution 1111|
|Abstract:||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.|
Critical Firm Size
|Document Type:||Working Paper|
|Appears in Collections:||Papers on Economics and Evolution, Max-Planck-Institut für Ökonomik|
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