Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57551 
Year of Publication: 
2011
Series/Report no.: 
Papers on Economics and Evolution No. 1111
Publisher: 
Max Planck Institute of Economics, Jena
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

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