Political activity’s strategic importance, not its degree, drives path dependence.

Evidence

For theoretic reasons, we decided to leave the factor included in the model (Lohmöller, 1989). Also, we find that all path coefficients have the predicted sign. Hence, Hypothesis 1 can be approved. Concerning the items of the endogenous LV, only the item ‘Path04’ does not comply with Lohmoller’s critical value of 0.1 for the path coefficients (1989, p. 60 f.). The highest path weight can be found with item ‘Path02’, indicating the highest impact on the latent construct. The impact of CPA on future strategic business decisions is significantly high when it explains path dependence through CPA. This result goes along with the high weight of the dimension ‘Strategic Importance of CPA’ which has a significant weight of 0.749. In order to validate the structural model we first find the R2 value to be exceptionally high with 0.692. This means that through this model we can explain 69.2 per cent of the whole variance of the latent construct ‘Path dependence through CPA’. Further, we look at the effect size f2 of each factor and the Stone-Geisser criterion Q2 for predictive relevance of the model. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 409

Categorization

• SEED: Angle: how the ‘strategic importance’ dimension of corporate political activity, not its sheer volume, does the causal work in locking firms into path dependence.