Evolutionary analysis of the firm and internal selection.

Evolutionary approaches of the firm devote a part of their analysis to firm behavior and to some processes acting inside the firm, however the internal workings of firms are, most of the time, not deeply analyzed. In this perspective, this paper attempts to investigate whether " we can drop internal selection in the evolutionary analysis of the firm ". In order to answer this question, we propose a micro-simulation model of internal selection where firms are engaged in production and R&D activities. They carry out two kinds of R&D and do not run any imitation process. Internal selection acts on R&D projects and we measure the impact of the selection mechanism on the firm's performances. The model generates persistent differences between firms according to their internal selection process.