NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Centers of Gravity: The Effect of Stable Shared Leadership in Top Management Teams on Firm Growth and Industry Evolution

Rajshree Agarwal, Serguey Braguinsky, Atsushi Ohyama

NBER Working Paper No. 24742
Issued in June 2018
NBER Program(s):Productivity, Innovation, and Entrepreneurship

We study the processes of firm growth in the evolution of the Japanese cotton spinning industry during 1883-1914 by integrating strategy and historical approaches and utilizing rich quantitative firm-level data and detailed business histories. The resultant conceptual model highlights growth outcomes of path dependencies as firms evolve across periods of single vs. shared leadership, establish stability in shared leadership, or experience repeated discord-induced TMT leader departures. While most firms do not experience smooth transitions to stable shared TMT leadership, a focus on value creation, in conjunction with talent recruitment and promotion, enabled some firms to achieve stable shared leadership in spite of discord-induced departures, engage in long term expansion, and emerge as “centers of gravity” for output and talent in the industry.

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Document Object Identifier (DOI): 10.3386/w24742

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