The Population Ecology of Organizational Founding: Location Dependence and Unobserved Heterogeneity.

Using pooled cross-sectional time series data collected at the level of 13 geographical regions, this paper investigates the effects of location dependence and unobserved heterogeneity on founding rates of rural cooperative banks in Italy from 1964 to 1988. Parametric and semiparametric models of organizational founding reveal that the organizational population is internally differentiated and that different segments of the population respond heterogeneously to general processes of legitimation and competition. This study emphasizes the importance of identifying the correct level of analysis at which population-level processes operate and of accounting for unobservable factors related to the cross-sectional structure of organizational populations. The findings demonstrate how an ecological approach that incorporates information on the spatial structure of the population can provide a more detailed understanding of the evolutionary dynamics of organizations. [ABSTRACT FROM AUTHOR]