The social structure of entrepreneurial activity: Geographic concentration of footwear production in the United States, 1940-1989
Citation: Olav Sorenson, Pino G. Audia (2000) The social structure of entrepreneurial activity: Geographic concentration of footwear production in the United States, 1940-1989. The American Journal of Sociology (RSS)
DOI (original publisher): 10.2307/3081182
Semantic Scholar (metadata): 10.2307/3081182
Sci-Hub (fulltext): 10.2307/3081182
Internet Archive Scholar (search for fulltext): The social structure of entrepreneurial activity: Geographic concentration of footwear production in the United States, 1940-1989
Tagged: Sociology (RSS) entrepreneurship (RSS), geography (RSS), organization theory (RSS)
Sorenson and Audio begin with the observation that almost any industry exhibits high degrees of geographic concentration. They suggest that there are two ready explanations for this: (1) that firms in concentrated regions might perform better or (2) that new firms happen to open in areas that are close. From an ecological perspective, the first would be associated with lower failure rates and the second with higher founding rates and either could drive concentration.
Economic answers around "industrial agglomeration" explicitly emphasize the first explanation. However, these explanations tend to ignore the fact that, to the extent that geography represents a point of differentiation, this should increase competition. Sociological accounts about access to resources and social ties tend to suggest the second. The authors suggest that dense organizations tend to increase the pool of potential entrepreneurs.
The authors test these theories using data from the failure and founding of shoe manufacturing plants int he US in the period from 1940 to 1989. They conclude that it is variation in the structural of entrepreneurial opportunities, and not economic conditions, that drives geographic concentration in the shoe industry. Higher founding rates, not lower failure rates, seem to sustain agglomerations.
Theoretical and Practical Relevance
Sorenson and Audio's article has been cited more than 300 times in the literature on entrepreneurship. It is particularly relevant to the literature on spinoffs which its results are broadly in support of.