Human Capital, Inter-firm Mobility and Organizational Evolution

Human Capital, Inter-firm Mobility and Organizational Evolution

Johannes M. Pennings and Filippo Carlo Wezel

The authors of this fascinating and original work contend that by analysing the conduct of organization members, a great deal can be learnt about firm behaviour and about the cooperative and competitive forces that underlie industry evolution.

Chapter 7: Spatial and Temporal Heterogeneity in Founding Patterns

Johannes M. Pennings and Filippo Carlo Wezel

Subjects: business and management, human resource management, organisation studies


INTRODUCTION The study of the relation between organizational dynamics and geography has a long tradition that traces back to research on human ecology (Park, 1926; Hawley, 1950). Human activities assume an orderly arrangement in space resulting in the formation of ‘human ecologies’ whose boundaries are spatially or geographically delimited (see McKenzie, 1968). Spatial considerations have been the object of growing interest in fields such as strategic management, sociology and economics (see Sorenson and Baum, 2003). Yet, the conditions under which local interactions shape industry evolution have received scant attention. Density-dependence theory, at least in its original formulation (Hannan, 1986), shares a similar limitation. Although a large body of empirical evidence has been collected in support of this theory (for a comprehensive review see Baum, 1996 and Carroll and Hannan, 2000), some of its basic assumptions have been questioned. Two recurrent criticisms revolve around (1) choice of the unit of analysis for studying ecological processes (Singh, 1993), and (2) dearth of evidence regarding micro behaviors which engender legitimation of new organizational forms (Hedström, 1994; Baum and Powell, 1995). The development of this discussion has drawn growing attention to the degree of heterogeneity as a precondition for the emergence, rise and decline of organizational populations. Spatial considerations have gained momentum (Lomi, 1995; Greve, 2002; Sorenson and Audia, 2000) and geography is now widely acknowledged to condition founding patterns. Although the effects of density-dependent legitimization have been found to span national boundaries (Hannan et al., 1995; Wezel and Lomi, 2003), other...

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