Institutional Embeddedness and the Dynamics of Organizational Populations

Abstract
Population density - the number of organizations of a particular type - has been used to study the effects of legitimation and competition on rates of organizational founding and failure. We investigate the influence of population density and relational density - the number of ties between organizations and their institutional environment - on founding and failure rates in a population of day care centers. Findings suggest that embeddedness in the institutional environment underlies the legitimating effects of initial population growth and the improved survival capabilities of a population of organizations in the long run.