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Empirical Validity of Density Dependence Hypothesis: Unobserved Heterogeneity and Failure Rates
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- Authors
- Issue Date
- 1998-12
- Citation
- Seoul Journal of Business, Vol.4 No.2, pp. 97-128
- Keywords
- U-shaped relation ; failure rates ; Innovation ; Competition
- Abstract
- This study examined whether strong support for density dependence
hypothesis in previous studies was due to unobserved inter-firm
heterogeneity Using the population of Dutch accounting firms, we
compared two model's one without firm heterogeneity variables and the
other with those variables Firm heterogeneity vanables examined here
included the adoption of a partner-associate structure, firm slze, the
number of domestic offices, firm-level human and social capital,
founding type, and organizational changes. Results indicated that
regardless of the inclusion of firm heterogeneity variables, density had a
strong U-shaped relation mth failure rates as predicted by density
dependence hypothesis Implications and future research directions
were discussed.
- ISSN
- 1226-9816
- Language
- English
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