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Barnett and Amburgey (1990) also found that prior deaths were negatively related to subsequent foundings of telephone companies.
Aldrich (1990) recommended that, in spite of the mixed empirical support for the effect of prior deaths on foundings, this thesis deserves further attention in studies of other populations.
The three ecological variables are: (1) prior foundings F(t-1), the total number of firms founded in the year prior to the event; (2) prior deaths D(t-1), the total number of firms that withdrew in the previous year; and (3) population density N(t), the total number of firms alive at the beginning of each year.
Population densities of investment, public, and private firms, prior foundings, and prior deaths were calculated annually for the period 1974 to 1989.
Foundings have been treated as the events through which the population is produced (Amburgey and Carroll 1984).
The distribution of the quarterly number of total foundings of investment firms in Egypt during the period 1974-1989 is shown in Figure 1.
In order to test the effect of population dynamics on organizational founding, Models 2, 3, and 4 contain both the linear term and the quadratic term of prior foundings and prior deaths.
TABULAR DATA FOR TABLE 2 OMITTED] [TABULAR DATA FOR TABLE 3 OMITTED] A low level of density encourages foundings and a high level of density suppresses them.
To test the curvilinear effect of prior foundings on founding rates, Model 2 contains both the linear and the quadratic terms of prior foundings.
Model 4 includes the effects of both prior foundings and prior deaths.
Concerning the effect of ecological variables on organizational founding rates, all the ecological variables (population density, prior foundings, and prior deaths) affect the founding rates significantly when examining the effects of these variables separately.
Prior foundings have the expected curvilinear effect on founding rates.