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Title:A corporation's culture as an impetus for spinoffs and a driving force of industry evolution PDF Logo
Authors:Cordes, Christian
Richerson, Peter J.
Schwesinger, Georg
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.
Subjects:Spinoff Formation
Critical Firm Size
Firm Performance
Industry Evolution
Corporate Culture
JEL:D21
L25
L26
M13
M14
C61
Document Type:Working Paper
Appears in Collections:Papers on Economics and Evolution, MPI für Ökonomik

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