Legal Environments and the Population Dynamics of Entrepreneurship: Litigation and Foundings in the Early American Film Industry, 1897–1918

America is known as the litigious society (Lieberman, 1981), and American organizations have become increasingly legalistic (Sitkin and Bies, 1993; Sutton, Dobbin, Meyer, and Scott, 1994). Of current organizational theory perspectives, neo-institutional theory (DiMaggio and Powell, 1991) has had the clearest focus on how the state and the legal environment (Edelman, 1990) have impacted organizations. Early institutional work on the role of the state tended to view organizations as passive recipients of state mandates, forced to conform to the inexorable tide of coercive isomorphism (DiMaggio and Powell, 1983). Of course, one reason for this deemphasis of active agency was because the dominant theories at the time tended to be managerialist. Early institutional theorists took as part of their mission the creation of an alternative to positing causality at the organizational level of analysis and linking outcomes with the rational actions of managers. Empirical studies of isomorphic processes at the interorganizational field level soon revealed, however, that managers as well as professional and state actors were active participants in shaping normative environments (Baron, Dobbin, and Jennings, 1986; Edelman, 1990; 1992; Mezias, 1990).