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An ecological theory of population-level organizational diversity

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  • BOONE, Christophe
  • WEZEL, Filippo Carlo
  • VAN WITTELOOSTUIJN, Arjen

Abstract

The question as to the evolution of population-level organizational diversity is at the heart of macro-level organizational sociology. However, the number of studies that direct this question explicitly is very limited, particularly in the empirical arena. We suggest a diversity-dependence theory that maps the macro-level evolution of organizational diversity with the micro-level events of entry and exit. We develop hypotheses as to the decision where to locate in product space by new entrants, as well as the likelihood of exit by incumbent firms given their location in product space. The key argument is that the micro-level entrants’ location decision and incumbents’ exit likelihood are both conditional upon macro-level organizational diversity, and that these events affect the evolution of population-level organizational diversity. Our hypotheses are tested in the British motorcycle industry in the 1895-1993 period, where we find support for our theory.

Suggested Citation

  • BOONE, Christophe & WEZEL, Filippo Carlo & VAN WITTELOOSTUIJN, Arjen, 2006. "An ecological theory of population-level organizational diversity," Working Papers 2007003, University of Antwerp, Faculty of Business and Economics.
    • Handle: RePEc:ant:wpaper:2007003
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    References listed on IDEAS

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    Cited by:

    1. Bogaert, Sandy & Boone, Christophe & Carroll, Glenn R., 2006. "Contentious Legitimacy: Professional Association and Density Dependence in the Dutch Audit Industry 1884-1939," Research Papers 1944, Stanford University, Graduate School of Business.
    2. Chaohong Zhou, 2010. "Toward an institutional ecology of establishment of foreign firms in the Chinese construction industry," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(2), pages 167-184.

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