Path Dependence Theory Research Articles

Intra-party Conflict and the Emergence of Islamic-Based Parties in the post-2019 Election in Indonesia

This article explains the emergence of new Islamic-based parties after the-2019 election in Indonesia. They are Ummah Party, Masyumi-Reborn Party, and Gelora Party. By using intra-party conflicts and path dependency theories, this study reveals that the emergence of those new Islamic parties is associated with frictions among party actors that troubled their prior parties, namely PAN, PBB, and PKS. The formation of the Ummah Party and Masyumi-Reborn Party was also situated by the 2014 and 2019 political contest, which represent the oppositional stance that could not be accommodated by the prior parties. Meanwhile, Gelora Party offered itself as a middle ground between the pro and contra camps of the government and provided a solution for the Islamic conservatism. This article argues that the emergence of new Islamic parties continues a pattern that has long plagued Indonesian Islamic-based parties, namely political fragmentation.

Path-dependency theory in a post-conflict state: the case of Fiji

PurposeViolent geo-political conflicts are on the rise across the globe, particularly within fragile states. Using path-dependency theory, this paper aims to explore Fiji in the context of its public administrative history examining the legacies of history that have contributed to its ongoing conflicts.Design/methodology/approachAn archival document analysis along with a theoretical thematic analysis was used to collect and assess data. Themes were identified that explain how and when the conflict became path-dependent.FindingsAnalysing conflict as path-dependent demonstrates how indirect rule while Fiji was under colonial rule, and the short time it has taken for the nation to transition from a colony to an independent State contributed to the eruption of conflicts in Fiji.Originality/valueThe research makes two key contributions, namely, it develops a theoretical understanding of conflict using path-dependency theory and it uncovers legacies of colonialism that have shaped conflict in Fiji.

DMZ 일원지역에 대한 관광자원 개발과정 연구 : 경로의존성을 중심으로

The year 2020 marked the 70th anniversary of the Korean War and the 67th anniversary of the establishment of the DMZ. This study aims to analyze the process of tourism resources development of the DMZ Region based on the tourism policy of the past Korean governments (nine administrations), focusing on the path dependency theory of the historical institutionalism. Considering the theoretical and practical classification methods together, tourism resources were classified as security tourism resources, eco-tourism resources, peace tourism resources, historical-cultural tourism resources. The analysis was applied by documentary research method and case study research method. The findings of the research identified that firstly, the period between the early 1980s and late 1990s, which is the path formative phase, was centered on security tourism. Secondly, the period between the late 1990s and late 2000s, which could be categorized as the path extensional phase, expanded to ecological and peace tourism. Thirdly, in the period between the late 2000s and late 2010s, which could be classified as the path consolidated. It stretched out its boundaries, linking and patterning ecological, peace, security, historical-cultural tourism. This shows that the process of tourism resources development of the DMZ Region based on the tourism policy of the past Korean governments has been institutionalized through path dependency.

Why are some family firms not innovative?: Innovation Barriers and Path Dependence in Family Firms

Although scholars have recognized the importance of innovation in family firms, the literature on family firm innovation tends to generally depict family firms as either ‘good’ or ‘bad’ for innovation, or focus on the factors with the potential to positively stimulate family firm innovation. Drawing on path dependence theory, this study focuses specifically on what family-specific barriers work against innovation in family firms. To that end, we follow a qualitative theory-building approach due to the limited amount of extant theory, and study a sample of four family businesses headquartered in Spain and Uruguay. The related propositions and theoretical contributions emerging from our study are shared in the concluding section.

Research on Path Dependence of Industrial Clusters: Taking Xuchang Tobacco Industrial Cluster as an Example

As the major carriers for the development of the regional economy and small-and-medium-sized enterprises, industry clusters are faced with challenges of sustainable development in the process of China's industrial upgrading and transformation. This study takes the development history of China's Xuchang tobacco industry cluster as the background, extracts some key concepts from Path-Dependence Theory and then constructs the relational model of path dependence elements, hoping to find out the formation mechanism of path dependence. The study shows that, firstly, learning costs, transaction costs, transformation costs and innovation risks determine what decisions to be taken for those enterprises in the clusters, and they are also the internal economic factors for formation of path-dependence. Secondly, the competence of an enterprise is the main reason accounting for the path dependence of the cluster. Lastly, habit seem to be the social cause and the highlight of the path dependence. Moreover, those path dependence elements are interactive and reciprocally enhanced.

Hungarian health care in the 1930s and 1940s: health care at a crossroads in East Central Europe before World War II

ABSTRACT The relationship between the Horthy era (1920–44) and the communist era shows continuities from a social historical perspective. The paper contributes to the reinterpretation of these relations by examining Hungarian health care in the 1930s and 1940s with a focus on the relationship between international transfers and path dependency in forging health care reforms. The author argues that the achievements communists regarded as inventions of socialism in health care and the welfare state had already been developed in the 1930s and 1940s. It was only because of the strict wartime budget of the early 1940s that these welfare reforms had not been realized. With the help of internal affairs documents, essays on health care, official statistics records in the National Archives of Hungary and the Semmelweis Library and Archives of Medical History as well as press material, Cora demonstrates that, even if communists depicted the interwar period as ‘fascist and imperialist’, the health care system of the so-called ‘productive social policy’ showed continuities. Moreover, social policy makers of the 1930s and early 1940s, such as Béla Johan, Ferenc Keresztes-Fischer and Béla Kovrig also designed welfare and health care reforms for the post-war period by both developing already existing Hungarian programmes and selectively adapting foreign welfare models (American management principles, the Alsace scheme and the Beveridge Plan). The study investigates Hungarian health care in view of the theory of path dependency and the macrohistorical convergence thesis developed by Tomka (on East–West convergence). It is within this framework that the paper addresses the issue of health care transfers to better understand the development of twentieth-century European health care systems by identifying similarities and differences in their development as well as to speculate on the trajectory of various political solutions to social challenges, including health care.

Path dependence in administrative adjudication: the role played by legal tradition

Based on the theory of path dependence, we show that legal tradition affects the administrative court’s rulings. It also complements the two other reasons for diversified verdicts: the experience of the judges and courts (specialization) and preference (bias) for one of the parties. This effect is persistent even if the verdicts are controversial and result in serious consequences for a party and when the penalty paid by the complainant is perceived as excessive but fulfilling the strict rules of law. We prove that judicial decision making is a function of path dependency stemming from a legal tradition of the court. To confirm this, logistic regression is applied to a sample of 337 erroneous excise duty documentation cases of heating oil sales from all sixteen provincial administrative courts in Poland. Increasing the specialization of judges and having them exchange experiences may be a remedy for the unjustified adjudication differences.

Organized Crime in Albania: A Path Dependence Perspective

Albanian organized crime has gained attention from the media and academia due to its significant role in international criminal world. Many studies have showcased Albanian criminal groups’ main characteristics and what makes them stand out. Nevertheless, such studies lack a theoretical application that binds the findings and provides an extensive panorama of Albanian organized crime development. Implying that the formation of Albanian organized crime is not a coincidence but rather an ongoing process, this study refers to path dependence theory to explain such an occurrence. Traditionally, the study of path dependence has focused on explaining how standards or rules become reinforced and determinant in a set environment by passing through three sequential stages. Consequently, the study uses a three-phase model to analyze Albanian organized crime from its inception to its latest stage.

Whirlwind model of entrepreneurial ecosystem path dependence.

The body of literature on entrepreneurial ecosystems (EEs) is rapidly expanding, but few studies have simultaneously examined their complexity, dynamics, and context. To better understand how they evolve, we introduce the notion of EE path dependence based on an original combination of an evolutionary approach and complex adaptive system theory. We thus present a whirlwind model that takes the form of subecosystems and that integrates a structural approach with attributes and a dynamic approach with sequences. Context is addressed through narratives and entrepreneurial stories. We conducted a case study on the EE of Montpellier, France. To characterize the subecosystems, we quantified the attributes using NVivo software, showing their links and evolution over time. The results shed light on the subecosystems that contributed the most to the entrepreneurial dynamics. This study contributes to extending path dependence theory to EEs. The results may help policymakers rethink their development strategies by setting priorities in accordance with the drivers of their EEs.Supplementary InformationThe online version contains supplementary material available at 10.1007/s11187-021-00553-x.

Reintermediating Voluntary Action: The Path-Dependent Pluralization of the Italian Volunteering Field

While the international literature has significantly addressed the “new forms of voluntary action,” there has been limited attention paid so far to the reintermediation processes of contemporary volunteering. This paper intends to fill this gap. First, a research approach based on a renewed sociological consideration of volunteering, path dependency and strategic field theory is presented and four ideal–typical traditions of volunteering (active membership, direct, program-based and organize-it-yourselves) are introduced. Then the Italian case is explored. Although the analysis is only exploratory, it enables us to understand the coevolutions of the four traditions and to identify a new restructuration model based on professional agencies coming from the membership tradition. The paper can help future studies to reconsider the magnitude and dynamics of second modernity trends and to tackle continuities and changes in the reintermediation of volunteering in situated and processual terms.

Austerity, path dependency and the (re)configuration of policing

ABSTRACT As a standard operating backdrop in the United Kingdom, for more than a decade austerity has become an increasingly dominant logic as to how policing can be delivered and (re)configured to do ‘more with less’. Yet beyond simple rationalisation of public policing in line with market principles, a more complex and long-standing trajectory underpins relations between the police and commercial ‘others’ set within this climate. With austerity as a guiding ‘code’, it has accelerated rather than punctuated the evolution of public policing dispersal. Using path dependency theory, the paper argues that change across both law and policy via different forms of critical juncture has embedded commercial principles, while simultaneously reconfiguring the symbolic (and operational) status of the police and their relationship with the public. In turn, the paper highlights that such pluralisation, in a genealogical sense, has tilted police authority away from central state control to a more dispersed and commercial model – but on a long-term trajectory which long precedes austerity as part of path-dependent change.

Corporate Venture Capital (CVC) Investment Timing, Strategic Misalignment, and CVC Value Addition

This study investigates the relationship between CVC investment timing and CVC value addition. Drawing on the path dependence theory, we theorize that timing of CVC investment influences the extent of strategic misalignment between CVCs and ventures, which would, in turn, affects the extent of CVC value addition. We maintain that there is a U-shape relationship between CVC investment timing and CVC value addition. Results of empirical analysis with data of 450 US-based biotechnology ventures corroborate the main thesis of the current study that CVCs’ investment timing plays an important role in influencing performance and behavioral outcomes of CVC value addition.

Understanding the impacts of increasing returns in the context of social media use

PurposeSocial networking sites (SNS) follow the same diffusion pattern and are subject to the same phenomena as other technologies (e.g. QWERTY keyboard, Microsoft Office and VHS) that were subject to increasing returns. Since they may lock-in users, increasing returns significantly alter the way a technology is used and should be managed. The purpose of this paper is thus to verify if SNS are subject to increasing returns and, if so, to better understand their impacts in this context.Design/methodology/approachA research model that combines path dependency theory (PDT) tenets with the push-pull-mooring (PPM) model of information technology (IT) switching was developed and tested with data collected from 416 SNS users via a field survey. Participants were voluntary students at a North American university enrolled in a compulsory undergraduate course in business administration. Partial least square analysis structural equation modeling (PLS-SEM) was used to validate our research model and test our hypotheses.FindingsResults show that SNS are subject to three forms of increasing returns: those stemming from device complementarity, learning and adaptive expectations. In addition, the findings show that increasing returns stemming from SNS use have the potential to lock-in SNS users by increasing their switching costs.Practical implicationsSNS users should be careful when using an SNS since such use can create a path that is self-reinforced and that can lock them due to the increasing returns it yields. SNS vendors/providers need to learn how to manage increasing returns if they want to foster continued use of their SNS and/or poach users from their competitors. Lastly, SNS regulators should revise or put in place new governance mechanisms since increasing returns, when properly leveraged, may undermine fair competition by allowing companies to lock-in users and lock-out competitors.Originality/valueThis study contributes to IS research by: (1) empirically demonstrating that increasing returns are present in the context of SNS use, (2) identifying increasing returns as key antecedents of user switching costs, (3) validating a theoretical framework that allows for the appraisal of PDT tenets in a variance model and (4) instantiating PDT tenets at the individual level.

Perceived risk of lock-in in the front-end phase of major transportation projects

Lock-in is defined as the tendency to continue with an inefficient decision or project proposal. The front-end phase is critical to project success, yet most studies have focused on lock-in in the implementation phase. Moreover, little is known about the way in which decision-makers perceive the risk of lock-in. In this paper we identify determinants of lock-in in the front-end phase and we reveal decision-makers’ perceptions of risk of lock-in. Our findings show that risk attitudes towards lock-in vary with the level of risk aversion. However, this is not sufficiently acute to drive the level of regret needed to avoid lock-in. This implies that decision-makers do not accurately assess the risk of lock-in and as such their risk perceptions are a mediating factor in the formation of lock-in. Based on escalation of commitment, path dependency, and prospect theory, the main contribution lies in providing a more comprehensive understanding of lock-in in the front-end phase.

Habitual Path Dependence of Interorganizational Relationships—A Response to Sydow

Abstract In “Path Dependence and the Roots of Interorganizational Relationship Challenges,” recently published by PPMG, we suggested the utility of path dependency theory in unpacking the developmental dynamics that may feed into contemporary problems of management and governance. Professor Jörg Sydow was moved to submit commentary on our article; we respond to his thoughtful comments in this essay.

Un-Locking Strategic Lock-Ins of Local Media: An Investigation of Local Media’s Preferences towards Public Support for Strategic Innovation

Media practitioners and policy makers are calling for more public support to facilitate the digital transformation of local journalism. However, newer academic literature focuses on explaining why public support for local media has become a necessity from a market failure and societal point of view. Almost no attention is dedicated to the question which known public support instruments might be considered as helpful from the perspective of local media and their digital transformation strategies. Therefore, this study draws on strategic path dependence theory and investigates how local media’s perceptions of innovation constraints (i.e., lock-in mechanisms), their innovation status (i.e., lock-ins) and their preferences for public support instruments to enable innovation (i.e., public un-lock mechanisms) differ depending on the type of strategy. Four strategies are compared: two content strategies (multimedia formats and artificial intelligence applications) as well as two commercial strategies (revenue diversification and digital payment models). Data about the four strategies are collected with an online survey of local media, which operate in the Swiss Canton of St. Gallen. The findings show significant differences between the investigated strategies and suggest a differentiated approach to public support of local media in the digital age.

Survival of the Tax Fittest: Path Dependence in Corporate Tax Planning

We investigate the potential of path dependence in explaining cross-sectional variation and persistence in efficient corporate tax planning. Variation in corporate tax planning among firms is far from fully understood. We propose that corporate tax planning strategies are path dependent. This implies that, once a business strategy is adopted, the range of tax strategies available to the firm is narrowed. If a more efficient tax planning strategy emerges, path dependence hampers firms from adopting that option, potentially resulting in tax planning inefficiencies. We compare new entrants to a market with incumbent firms and find that new entrants have an entrant’s tax edge; that is, new entrants are more efficient in tax planning compared to incumbent firms. Consistent with our predictions and path dependence theory, we find that the entrant’s tax edge is amplified when incumbent firms in the market are relatively inflexible. Finally, we explore whether new entrants use their tax edge as a competitive mechanism. We find new entrants only outperform incumbents in tax planning efficiency when competition is strong, and not when competition is weak.

Industry Dynamics and Path Dependencies: Wind Energy in Europe and Asia

Industry dynamics are about stability and change on the field level of analysis. This chapter will use the lens of path dependence to study the emergent field of renewable energy. On this level of analysis, path dependence theory has to address not only technological, but also organizational and institutional dynamics that intricately interact. More specifically, by means of such a multi-dimensional lens, this chapter will look at the increasing generation of electric energy through wind power to illustrate different industry dynamics in four countries. The UK and Japan will illustrate the persistence of an established path in generating electric energy through fossil fuels and nuclear, while the German and, more tenuously, Chinese cases serve as examples for path-breaking change and the conditions making the emergence of renewables, and in particular wind energy possible.

Early Life Suffering Experience from Great Famine on Firm Charity, Agency Costs, and Corporate Governance

This study examines the impact of directors’ famine experience on the corporate donation decision. We use a unique data set of 16,082 firm-year observations from Chinese listed firms to show that directors who experienced the Great Chinese Famine during 1959–1961 make more corporate donations, a result that supports the path dependency theory related to the effect of prior experiences on subsequent behaviors. The relationship between a director’s famine experiences and corporate charitable contributions is robust across different types of ownership and industry. We further show that these directors appear to consume fewer perquisites (i.e., lower agency costs), improve social responsibility, mitigate earnings management, and enhance internal control quality.

The Nepal’s Political Relationship with India: Under the Lens of Path Dependency Theory

The recent developments in Nepal’s politics from the abolition of autocratic monarchy, promulgation of a new constitution to successful completion of local, provincial, and federal level elections can be perceived as Nepal’s politics achieving miraculous success in forming democracy. Throughout the history, heavy reliance on the Indian economy has been considered as a major hurdle to Nepal’s sovereignty. This paper analyzes the Nepal-India relationship through path-dependent theory and argues that with series of above mentioned democratic success, the contemporary Nepali foreign policy towards India is at a critical juncture where Nepal can incorporate new changes to make its policies independent and uninfluenced by the Indian government. Analyzing the series of political and democratic events and foreign policies implemented to date, this paper aims to understand how the Nepali leadership can utilize these recent series of democratic successes as a turning point to break the traditional approach of forming policies to appease the Indian government and receive political and economic support and implement new policy changes leveraging on the multilateral organizations and developmental partners for its support economically and politically.