ation (Hannan & Carroll, 1992). A major focus of the theory of population ecology is upon effects of competitive relations of firms in an industry over time, especially on vital rates. These rates are argued to be "density dependent" (dependent on the existing number in the population) due to two opposing forces: legitimation and competition.
As the number of organizations increases, legitimacy rises, causing founding rates to rise and mortality rates to fall. But at the same time, competition grows, causing founding rates to fall and mortality rates to rise. Population ecology theory argues that boundaries are unitary and temporally stable because competition, legitimacy, and carrying capacity operate among organizations that are fairly homogeneous in terms of their environmental vulnerability.
With respect to organizational change, Hannan (1988) notes that population ecology theory postulates three processes by which the dynamics of organizational populations might shape patterns of long-term social change.
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