Working Paper: NBER ID: w24742
Authors: Rajshree Agarwal; Serguey Braguinsky; Atsushi Ohyama
Abstract: We study the processes of firm growth in the evolution of the Japanese cotton spinning industry during 1883-1914 by integrating strategy and historical approaches and utilizing rich quantitative firm-level data and detailed business histories. The resultant conceptual model highlights growth outcomes of path dependencies as firms evolve across periods of single vs. shared leadership, establish stability in shared leadership, or experience repeated discord-induced TMT leader departures. While most firms do not experience smooth transitions to stable shared TMT leadership, a focus on value creation, in conjunction with talent recruitment and promotion, enabled some firms to achieve stable shared leadership in spite of discord-induced departures, engage in long term expansion, and emerge as “centers of gravity” for output and talent in the industry.
Keywords: Top Management Teams; Firm Growth; Industry Evolution; Shared Leadership
JEL Codes: L25; L26; M12; M13; N85
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stable shared TMT leadership (M54) | higher growth rates (O49) |
| discord-induced departures (J63) | lower growth rates (O49) |
| stable shared TMT leadership (M54) | accumulation of resources (E22) |
| accumulation of resources (E22) | emergence as centers of gravity in the industry (L19) |
| instability within TMTs (C62) | significant growth impairments (O11) |
| stable shared TMT leadership (M54) | long-term value creation (D25) |