Download This PaperEmergence of Industrial Stylized Facts out of Innovative and Imitative Entrepreneurship
34 Pages Posted: 15 May 2020 Last revised: 14 Apr 2022
Date Written: April 14, 2022
Abstract
This paper illustrates an artificial ecosystem where hierarchical organizations emerge out of collisions between individuals, problems, solutions and choice opportunities according to the rules of the Garbage Can Model of organizational choice (GCM). This artificial world suggests that specific GCM decision styles separate organizations that are founded around original competences and innovations from those that are based on variable degrees of creative imitation of existing practices.
By discriminating between organizations that are based on innovative entrepreneurship from those that are based on imitative entrepreneurship, this artificial world first of all revives the debate between the \emph{liability of newness} and the \emph{liability of adolescence} of newly-founded organizations, establishing a linkage to alternative GCM decision styles at founding. Furthermore, alternative GCM decision styles reproduce the heterogeneity of firm size distributions across industries and regional economies, a stylized empirical fact for which no explanation has been advanced hitherto. The explanation proposed herein is based on differential balance points between innovative and imitative entrepreneurship.
Keywords: Garbage Can Model, Emergence of Organizations, Organizational Ecology, Liability of Newness, Liability of Adolescence, Firm Size Distribution
JEL Classification: D79, C69
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