Ecological dynamics of industrial organizations in South Korea

Abstract

By utilizing the ecological perspective, this study examines ecological dynamics of industrial organizations in the manufacturing sector of the Korean economy over the period between 1950 and 1990. First, this study investigates how a population of manufacturing establishments grew in size across different age cohorts. The investigation of the age structure of a population of manufacturing establishments shows that the overall growth trajectory follows, by and large, a pattern of dominance of large-scale production units. It also shows that expansion of existing manufacturing establishments rather than entry of new ones has been the significant contributing factor in accounting for the growth of industry. Second, this study examines how certain cohorts of organizations survived over time and how they differentially died out in the face of rapid environmental change. The examination of the underlying population volatility of manufacturing establishments shows that the net mortality rates of different birth cohorts decrease with age. However, during the periods of economic recession and political turmoil, old cohorts have higher net mortality rates than younger ones, indicating their vulnerability toward profound institutional realignments as well as their heavy reliance on political networks. This finding indicates that the liability of newness thesis should be applied with caution.