In this study, we formulated and tested a theory about how heterogeneity among subpopulations affects the degree to which organizations in these subpopulations contribute to and benefit from the overall population's legitimacy. Historical data on banking in Shanghai were used. Firms in subpopulations with a higher "grade of membership" were found to contribute strongly to the legitimacy of the general population; firms in subpopulations with a lower grade of membership benefited most from legitimacy spillovers. The concepts of "fuzzy density," "contrast," and public acceptance were applied to measuring legitimacy.

T he organizing stages that predate entry into an organizational population were studied from an ecological perspective. Based on a detailed analysis of foreign banks in Shanghai, findings are presented that suggest that the likelihood of moving from the organizing phase to the operational stages is nonmonotonically dependent on the length of the waiting time. We found that firms seeking to gain entry into a population are negatively affected by the presence of other organizers in close geographical proximity, while the number of already-established organizations has an inverted U-shaped relationship with the aspirant's likelihood of entering a relationship that operates more broadly. After investigating the effect of the geographical location of other potential entrants, as well as the effect of relative sizes and countries of origin, we have drawn inferences about the strength of these competitors' identities and their impact on a social actor's decision to enter the population. Our findings are informative not only for those studying organizational founding patterns, but also for those interested in the early process of identity formation.

Why do some public organizations survive for many decades, whereas others are terminated within a few years? This question of organizational survival has long intrigued public administration scholars. To explain longevity, public administration research has focused on organizational design features and adaptive capacities. The results have been inconclusive. This article explores an additional explanation for survival and demise: the density dependence theory as formulated in the field of organizational ecology. The underlying premise of this theory is that certain environments can only sustain a certain number of similar-type organizations. A rising number of organizations fuels competition for scarce resources, which inevitably leads to the demise of organizations.Density theory has often been tested in the business literature, but has been rarely applied to public sector organizations. In this article, we test whether this theory can help explain organizational survival in a population of US federal independent public agencies (n = 142). Our results show that density matters. This is good news for public administration research: the inclusion of density boosts the explanatory power of traditional variables such as design and adaptation.

Public administration scholars tend to take for granted that organizational adaptation is important. This common notion that public organizations must adapt to stay alive has not been put to the test in the field of public administration, however. Intriguingly, organization ecologists find that adaptation does not matter and might even be counterproductive for individual organizations. They argue that the absence of adaptation—which they refer to as structural inertia—actually enhances the likelihood of survival. But organization ecologists focus mostly on nonpublic organizations. This prompts the question whether adaptation in public organizations really matters. In this article, we test these contrasting claims (while controlling for design features) on a population of U.S. federal independent public agencies (n = 142). Our findings suggest a subtle narrative. We conclude that proactive adaptation increases termination hazards. But inertia does not seem to significantly enhance survival chances.