Institutional Constraints and Ecological Competition in the Early American Telephone Industry

This study examines the effects of institutional contraints — political boundaries and regulatory policies — on the organizational evolution of the early American telephone industry. State-level panel data on independent telephone companies operating from 1902 to 1942 in the 48 contiguous states are analyzed to estimate the effects of constraints imposed at the local, state, and federal levels of government. Our theoretical lens focuses on patterns of interdependence, especially competition, among the organizational forms of the industry in different institutional environments. Empirical findings suggest that competition among these organizational forms was both shaped and changed by institutional constraints, but often in unintended ways.