The Spatial Scope of Competition and the Geographic Distri- bution of Entrepreneurship: Magazine Foundings and the U.S. Post Office Heather A. Haveman, a Christopher I. Rider b a) University of California, Berkeley; b) Emory University Abstract: We propose that the geographic distribution of entrepreneurship evolves as developing communication systems alter the spatial scope of competition Our arguments imply that as spatial barriers to communication diminish founding events will be less sensitive to local context and more sensitive to distant competition. We test this argument with data on the first modern communication system, the US post office, and foundings of organizations that depended on it for distribution: magazine-publishing ventures. We find that as the postal system expanded, the spatial scope of competition among magazines increased: magazines in distant locations exerted more negative effects on local founding rates, whereas magazines in the focal location exerted less positive effects on local founding rates These findings reveal how spatial barriers to competition shape the geography of entrepreneurial activity. Keywords: competition; technological change; geography; space; entrepreneurship; founding rates Editor(s): Jesper Sørensen, Olav Sorenson; Received: September 17, 2013; Accepted: October 27, 2013; Published: April 8, 2014 Citation: Haveman, Heather A., and Christopher I. Rider. 2014. “The Spatial Scope of Competition and the Geographic Distribution of Entrepreneurship: Magazine Foundings and the U.S. Post Office.” Sociological Science 1: 111-127. DOI: 10.15195/v1.a9 Copyright: c  2014 Haveman and Rider. This open-access article has been published and distributed under a Creative Commons Attribution License, which allows unrestricted use, distribution and reproduction, in any form, as long as the original author and source have been credited. D espite tremendous advances in communica- tion systems that reduce spatial barriers to interaction, much research demonstrates the continuing relevance of geography in modern so- cieties. People and organizations remain situated in distinct places characterized by local cultures and laws, site-specific resource constraints, and lo- calized information flows (Fischer 1992; Freeman and Audia 2006; Marquis and Battilana 2009). Both people and organizations continue to cluster in space (Marshall 1920; Porter 1990; Krugman 1991), and their likelihood of interacting increases with proximity (Festinger, Schacter, and Back 1950; Hannan and Freeman 1989). Consequently, when starting new organizations, entrepreneurs typically obtain resources from the communities where they reside (Sorenson and Audia 2000). Research on organizations and geography is limited, however, by its overwhelming focus on modern research sites where communication sys- tems are well developed and, therefore, spatial barriers to communication are low (for excep- tions, see Pred [1973, 1980] and Marquis [2003]) We know far less about how changes over time in the speed, reliability, or cost of communica- tion alter organizational interactions across space Many scholars argue that such advances reduce the “friction of distance” (Janelle 1969) and so reduce geographic constraints on interaction (e.g., McLuhan 1962; Janelle 1968; Pred 1973, 1980; Kern 1983; Giddens 1990; Friedland and Boden 1994). As spatial barriers to communication fall, so- cial, economic, and political interactions expand in physical space, creating communities and mar- kets that span continents and oceans—increasingly homogenous “global villages” and “world econo- mies” (McLuhan 1962; Janelle 1969; Sassen 2012) Indeed, communication systems like the post of- fice and Internet are often developed specifically to connect geographically distant individuals and organizations (John 1995; Hafner and Lyon 1996) These developments free actors from the con- straints of their particular locations and weaken influences of both place (location) and space (dis- tance) on organizations (Marquis 2003) In sum, this argument implies that as spatial barriers to interaction diminish the geographic scope of com- petition expands, so that organizations compete over greater distances. sociological science | www.sociologicalscience.com 111 April 2014 | Volume 1