The Legitimacy Threshold Revisited: How Prior Successes and Failures Spill Over to Other Endeavors on Kickstarter

Academy of Management Journal, Forthcoming

57 Pages Posted: 22 Apr 2019

See all articles by Jean-François Soublière

Jean-François Soublière

University of Alberta - Department of Strategic Management and Organization

Joel Gehman

University of Alberta - Department of Strategic Management and Organization

Date Written: March 22, 2019

Abstract

How does the legitimacy conferred on entrepreneurial endeavors affect the legitimacy of subsequent ones? We extend the notion of a “legitimacy threshold” to develop and test a recursive model of legitimacy. Whereas extant research has focused on whether entrepreneurial endeavors garner sufficient support from key audiences to cross this threshold, we argue that the order of magnitude by which they succeed or fail is consequential for later entrants, too. Distinguishing “blockbuster” from “unsung” successes, and “path breaking” from “broken path” failures, we contend that recent successes and failures affect related subsequent endeavors in predictable, though sometimes counterintuitive ways. We test our hypotheses by examining 182,358 entrepreneurial endeavors pitched within 165 categories over a six-year period on Kickstarter, one of the most important crowdfunding platforms. We show that individual outcomes, taken collectively, generate legitimacy spillovers, either by encouraging audiences to repeatedly support other related endeavors or by discouraging them from doing so. Our research contributes to understanding the recursive nature of legitimacy, the competitive dynamics of entrepreneurial efforts, and crowdfunding platforms.

Keywords: legitimacy, entrepreneurship, crowdfunding, resourcing

JEL Classification: O31, L26

Suggested Citation

Soublière, Jean-François and Gehman, Joel, The Legitimacy Threshold Revisited: How Prior Successes and Failures Spill Over to Other Endeavors on Kickstarter (March 22, 2019). Academy of Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3358704

Jean-François Soublière

University of Alberta - Department of Strategic Management and Organization ( email )

Edmonton, Alberta T6G 2R6
Canada

Joel Gehman (Contact Author)

University of Alberta - Department of Strategic Management and Organization ( email )

Edmonton, Alberta T6G 2R6
Canada
(780) 248-5855 (Phone)

HOME PAGE: http://www.joelgehman.com

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