Contentious Legitimacy: Professional Association and Density Dependence in the Dutch Audit Industry 1884-1939

51 Pages Posted: 17 Oct 2006

See all articles by Sandy Bogaert

Sandy Bogaert

University of Antwerp

Christophe Boone

University of Antwerp - Faculty of Applied Economics

Glenn Carroll

Stanford Graduate School of Business

Date Written: September 2006

Abstract

Neo-institutionalists have criticized organizational ecology's density-dependent theory of legitimation for being a "black box" leaving the details of the legitimation process unspecified, and ignoring the pre-eminently political nature of the creation of new organizational forms. In the present paper, we show that Hannan, Pólos and Carroll's (2007) revised density theory, which explicitly incorporates firm heterogeneity, allows for the integration of institutional reasoning and collective action in a density-dependent quantitative framework. Based on this theory, we derive predictions about "fuzzy" density and population contrast and test them in the Dutch audit industry, a setting where the legitimation process was fiercely contested by several professional associations for decades in the period 1884-1939. Models of audit firm exit provide strong evidence for the salience of the revised theory in understanding the legitimation process and reveal that fuzziness, resulting from fragmented collective action, hampers it.

Suggested Citation

Bogaert, Sandy and Boone, Christophe and Carroll, Glenn R., Contentious Legitimacy: Professional Association and Density Dependence in the Dutch Audit Industry 1884-1939 (September 2006). Stanford GSB Research Paper No. 1944, Available at SSRN: https://ssrn.com/abstract=937938 or http://dx.doi.org/10.2139/ssrn.937938

Sandy Bogaert

University of Antwerp ( email )

Prinsstraat 13
Antwerp, 2000
Belgium

Christophe Boone

University of Antwerp - Faculty of Applied Economics ( email )

Prinsstraat 13
Antwerp, 2000
Belgium

Glenn R. Carroll (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States