Theorizing path dependence: a review of positive feedback mechanisms in technology markets, regional clusters, and organizations

June 2, 2013 Editor 0

The concept of path dependence has often been criticized as vague and only narrowly applicable. Although we can find some very refined definitions of the concept, we also find a wide range of empirical phenomena being described as path-dependent. We argue that more detailed accounts of the positive feedback mechanisms that form paths can take path dependence beyond this state of being overdetermined, but under-specified. Reviewing three well-described cases of path-dependent dynamics in technology markets, regional clustering, and organizations, we define a core set of positive feedback mechanisms that constitute path dependence at different analysis levels and clarify the relationship between positive feedback and increasing returns. We show that path-dependent processes, that is, processes driven by positive feedback that veer toward rigidity or lock-in, can be (but do not have to be) found under many labels, including structural inertia, coevolution, or institutional persistence. We conclude that a precise definition of path dependence does not need to be at odds with the concept’s widespread use in understanding organizational and industrial development processes.

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Categories: Management