The Missing Link between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications

Journal of Management Studies, Forthcoming

24 Pages Posted: 18 Jul 2011

See all articles by Jean-Philippe Vergne

Jean-Philippe Vergne

Western University - Ivey Business School

Rodolphe Durand

HEC Paris - Strategy & Business Policy

Date Written: June 18, 2010

Abstract

Path dependence is a central construct in organizational research, used to describe a mechanism that connects the past and the future in an abstract way. However, across institutional, technology, and strategy literatures, it remains unclear why path dependence sometimes occurs and sometimes not, why it sometimes lead to inefficient outcomes and sometimes not, how it differs from mere increasing returns, and how scholars can empirically support their claims on path dependence. Hence, path dependence is not yet a theory since it does not causally relate identified variables in a systematized manner. Instead, the existing literature tends to conflate path dependence as a process (i.e. history unfolding in a self-reinforcing manner) and as an outcome (i.e. a persisting state of the world with specific properties, called ‘lock-in’). This paper contributes theoretically and methodologically to tackling these issues by: (1) providing a formal definition of path dependence that disentangles process and outcome, and identifies the necessary conditions for path dependence; (2) distinguishing clearly between path dependence and other ‘history matters’ kinds of mechanisms; and (3) specifying the missing link between theoretical and empirical path dependence. In particular, we suggest moving away from historical case studies of supposedly path-dependent processes to focus on more controlled research designs such as simulations, experiments, and counter-factual investigation.

Keywords: path dependence, path dependency, methodology, inertia, persistence, chaos, imprinting, first-mover advantage

JEL Classification: B52, C18, C12, D20, D62, D90, M10, O33

Suggested Citation

Vergne, Jean-Philippe and Durand, Rodolphe, The Missing Link between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications (June 18, 2010). Journal of Management Studies, Forthcoming . Available at SSRN: https://ssrn.com/abstract=1888292

Jean-Philippe Vergne (Contact Author)

Western University - Ivey Business School ( email )

London, Ontario
Canada

Rodolphe Durand

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

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