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

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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.

Original languageEnglish
JournalIndustrial and Corporate Change
Volume22
Issue number3
Pages (from-to)617-647
Number of pages31
ISSN0960-6491
DOIs
Publication statusPublished - 06.2013
Externally publishedYes

Bibliographical note

Previous versions of this article have been presented at various conferences such as the 23rd EGOS Colloquium 2007 and the VHB-Pfingsttagung 2008 and have been discussed widely in the context of the Pfadkolleg Research Center at Freie Universität Berlin, Germany. We are thankful for all the useful feedback we have received there. We are particularly indebted to Jörg Sydow, Jakob Kapeller, Sigrid Quack, Arndt Sorge, Jan Jacobs, Stefan Kirchner, and Sanneke Kuipers for their detailed comments on previous versions of this manuscript. We also thank several anonymous reviewers who have supported the development of this article. This research as been funded by the German research foundation DFG (Deutsche Forschungsgemeinschaft).

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