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Using data on the population of English and Scottish universities and their spinoff firms over a period of 15 years, we show how differential coercive and normative state powers can affect the diffusion of innovations among public organizations. Our work has implications for institutional and diffusion theories as results indicate that when state-mandates are not backed by specific monitoring and sanctioning mechanisms, public organizations are left exposed to fashion setters and mimetic behaviors that dictate the process of adoption. The paper has also implications for fashion theories as it illustrates that previously proposed country-level norms of rationality are insignificant predictors of fashion diffusion. Instead, we show that industry- or field-level norms, even when these are controlled by the state, can be used to prevent fashions from spreading.