A Corporation's Culture as an Impetus for Spinoffs and a Driving Force of Industry Evolution

Christian Cordes, Peter J. Richerson and Georg Schwesinger ()

Papers on Economics and Evolution from Philipps University Marburg, Department of Geography

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.

Keywords: Spinoff Formation; Critical Firm Size; Firm Performance; Industry Evolution; Corporate Culture Length 23 pages (search for similar items in EconPapers)
JEL-codes: C61 D21 L25 L26 M13 M14 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-hme, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: A corporation’s culture as an impetus for spinoffs and a driving force of industry evolution (2014)
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