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The role of legitimacy for the survival of new firms

Published online by Cambridge University Press:  02 February 2015

Richard S Brown
Richard S Brown*
Affiliation:
Fox School of Business and Management, Temple University, Philadelphia, PA, USA
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Abstract

Using a content analysis on a sample of 77 internet companies that went public in the late 1990s, this paper tested the factors surrounding the legitimacy of new firms in a turbulent environment. Support was found for most of the hypotheses as to which factors were legitimating and which had the opposite effect. Legitimating factors included CEO Duality and Alliance inclusion while delegitimating factors included Capital Raising, Acquisitions, Restructuring, Delisting and Geographic Diversification. This paper adds to the theoretical issues surrounding legitimacy as a precursor to reputation. At the same time, this work fills a gap in the literature which currently lacks empirical testing of the notion of legitimacy.

Keywords

legitimacyreputationstart-ups
Type
Research Article
Information
Journal of Management & Organization , Volume 18 , Issue 3 , May 2012 , pp. 412 - 427
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2012

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