Abstract

Research in institutional theory generally suggests that imitating a successful business model can provide initial legitimacy for new ventures (Aldrich & Fiol, 1994; DiMaggio & Powell, 1983). However, researchers of “institutional distance” suggest that institutional requirements differ between countries (Kostova, 1999; Kostova & Zaheer, 1999; Xu & Shenkar, 2002). The fundamental assumption that the successful business is highly legitimated and presents an appropriate way of doing business remains questionable when considering the difference in market contexts.

In this paper, we aim to further explore the factors which influence the dynamics between imitation and initial legitimacy generation. We explore the business model copycats (BMCs) — firms that try to establish their market place in emerging economies by imitating leading business models from advanced economies — from the institutional perspective. We investigate a question that: what influences BMCs’ initial legitimacy?

Our goal is to contribute to theory by investigating the contingencies and boundary conditions at play in the relationship between imitation and the initial legitimacy generation of BMC ventures in emerging economy.

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