Abstract

Legitimacy is crucial to firm survival and growth. By complying with taken-for-granted rules and norms, firms earn legitimacy and, as a result, elicit critical resources from key stakeholders (Aldrich & Fiol, 1994). While legitimacy is ultimately a collective-level phenomenon, individuals’ judgments and perceptions coalesce to guide those assessments. As a result, legitimacy judgments vary across actors. Because firms often encounter conflicting institutional demands when entering a market for the first time (Pache & Santos, 2010), those judged to be legitimate by one group may be judged illegitimate by others.

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