Theories of new venture success and survival have examined the reputation and resources of new firms. Institutional theory has argued that firms mimic the behaviors of other successful firms in order to gain legitimacy (Glynn & Abzug, 2002; Deephouse, 1996; Dimaggio & Powel, 1983). Firms with better reputations have easier access to capital, suppliers, employees and customers and this can be a useful competitive advantage over other firms (Barney, 1991).
One important measure of a new venture’s reputation may be the organization’s credit rating. Not only does this provide information on financial resources of the organization, but it can also indicate characteristics of the firm’s business practices such as promptness, reliability, and responsibility. However, new firms often fail to give this much consideration because of other, more immediate demands on their attention, their perceived inability to affect it, or even ignorance regarding its importance. This study investigates variables that contribute to reputational awareness and its impact on firm performance.
Eesley, Dale T.
"ORGANIZATIONAL REPUTATION AND NEW VENTURES: FIRM AWARENESS OF CREDIT RATINGS AND ITS IMPACT ON FIRM PERFORMANCE (SUMMARY),"
Frontiers of Entrepreneurship Research: Vol. 27
, Article 4.
Available at: http://digitalknowledge.babson.edu/fer/vol27/iss15/4