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In this study we examine how links between dominant designs and competitive processes influence patterns of founding and failure in telecommunications service industries characterized by positive network externalities. We study the effects of the dominant design established by the Consultative Committee on International Telephone and Telegraph (CCITT) for facsimile transmission technology on facsimile transmission service organizations (FTSOs) that provide a variety of facsimile transmission services over a shared telecommunications network. The findings provide clear evidence of links between dominant designs and ecological processes in an evolving organizational population. Our findings suggest the need to refine earlier theorizing regarding the relationship between dominant designs and population dynamics.
Baum et al. (Thu,) studied this question.