Legitimating Characteristics and Firm Emergence
Journal of Enterprising Culture, Vol.16, Issue 3, pp. 233-256, 2008
Posted: 4 Nov 2009
Date Written: September 2008
Most of the organizational theories take the existence of organizations for granted. Thus, attempts to understand success and failure at the nascent firm stage have often been conducted without an underlying theory to explain why some nascent firms succeed in becoming new firms while others do not. This study proposes that institutional theory offers an explanatory framework to explain firm emergence. Specifically, we argue that nascent firm becomes new firm thanks to resource endowments. The reliance on legitimating characteristics will grant a nascent firm an access to critical resources necessary for its emergence. We explore these ideas empirically and find support for our basic arguments.
Keywords: Entrepreneurship, firm emergence, nascent entrepreneurs, nascent firms, legitimacy, legitimating characteristics, institutional theory, PLS estimation
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