Firm entry and institutional lock-in: An organizational ecology analysis of the global fashion design industry

Abstract

Few industries are more concentrated geographically than the global fashion design industry. We analyze the geography and evolution of the fashion design industry by looking at the yearly entry rates at the city level. In contrast to other industry studies, we find that legitimation processes operate locally and competition processes globally. This result points to the rapid turnover of ideas in the fashion design industry on the one hand and the global demand for fashion apparel on the other hand. We attribute the decline of Paris in the post-war period to "institutional lock-in," which prevented a ready-to-wear cluster to emerge despite the presence of the haute couture cluster. An extended organizational ecology model provides empirical support for this claim.