This is an ecological study with a focus on inter-dependence relationships between two organizational populations. The research context is the banking industry in Shanghai from 1847 to 1940. Drawing upon recent development in an identity-based view of organizational forms and the inter-dependence model of established and emergent populations, and combining the life cycle of the population of piao-hao firms, I investigate the evolution of piao-hao firms, a population of traditional Chinese banking institutions, by looking at the effects of modern banks (foreign banks and domestic modern banks) on the vital rates of piao-hao firms across different life cycle stages. Empirical results suggest an asynchronous pattern of modern banks’ effects on the founding and exit rate of piao-hao firms....[ Read more ]

This is an ecological study with a focus on inter-dependence relationships between two organizational populations. The research context is the banking industry in Shanghai from 1847 to 1940. Drawing upon recent development in an identity-based view of organizational forms and the inter-dependence model of established and emergent populations, and combining the life cycle of the population of piao-hao firms, I investigate the evolution of piao-hao firms, a population of traditional Chinese banking institutions, by looking at the effects of modern banks (foreign banks and domestic modern banks) on the vital rates of piao-hao firms across different life cycle stages. Empirical results suggest an asynchronous pattern of modern banks’ effects on the founding and exit rate of piao-hao firms. Specifically, at the emerging stage, piao-hao firms first had benefited from the early development of modern banks due to no/limited resource space overlap and a clear distinction in identities, in terms of founding of piao-hao firms; at the holding stage, further development of modern banks and the expansion of their resource space began to depress the founding and elevate the exit rate of piao-hao firms. Finally, at the failing stage, as modern banks further proliferated, the exit rate of piao-hao firms was also depressed because modern banks had helped screening out vulnerable piao-hao firms through competitive selection, and the remaining firms enjoyed either scale advantages or strong connections with certain partners or other institutions, which in turn had helped them withstand environmental selection and slow down the speed of vanishing as a form. This thesis sheds new light on legitimacy building literature and furthers the understanding of the post-competition relationships in an organizational community.