I develop a general equilibrium model in which the accumulation of organizational capital is central for establishment dynamics. I compare its transition dynamics after a shock that introduces an incompatibility between new productive processes and accumulated organizational capital with those...

Using European data, this paper finds that (1) industry entry and exit rates are positively related to industry rates of investment-specific technical change (ISTC); (2) the sensitivity of industry entry and exit rates to cross-country differences in entry costs depends on industry rates of...