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Organizational Foundings in Community Context: Instruments Manufacturers and Their Interrelationship with Other Organizations

Combining insights from organizational ecology and social network theory, we examine how the structure of relations among organizational populations affects differences in rates of foundings across geographic locales. We hypothesize that symbiotic and commensalistic interpopulation relations function as channels of information about entrepreneurial opportunities and that differing access to such information influences the founding rate. Empirical analyses of U.S. instruments manufacturers support this argument. The founding rate of instruments manufacturers rises with the densities of organizational populations that have symbiotic and commensalistic relationships with instruments manufacturers. These factors encourage the initial foundings of instruments manufacturers in areas where such organizations were not previously found. The dominance of organizational populations tied to instruments manufacturing by symbiotic or commensalistic relations increases the rate of foundings of instruments manufacturers, whereas the dominance of organizational populations that lack these relations decreases it. Finally, we find that interpopulation relationships that hinge on direct contact have less impact on initial foundings as geographic distance increases. These results have implications for research on organizational ecology, entrepreneurship, urban sociology, and economic geography.