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Rethinking New Venture's Cognitive Legitimacy: An Experimental Study

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  • Xueling Li
  • Chong Wang
  • Xiaobo Xu

Abstract

New ventures' legitimacy problems, including cognitive legitimacy, appear to stem from ‘legitimacy threshold’ and ‘the liability of newness’. Based on the legitimacy model proposed by Shepherd and Zacharakis, we extended their cognitive legitimacy from the customer's perspective in this paper. A theoretical framework is proposed to build cognitive legitimacy from new ventures' product, organization, and managers by differentiating customers' positive perception and negative perception. 100 samples were collected in an experimental study to analyze 900 decision values. The findings suggest that a company's cognitive legitimacy is related to both quantity of information and quality of information owned by customers. Specifically, customers' positive cognition will improve cognitive legitimacy, whereas the negative will decrease it. Therefore, cognitive legitimacy includes not only corporate recognition but also corporate reputation. Copyright © 2014 John Wiley & Sons, Ltd.

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  • Xueling Li & Chong Wang & Xiaobo Xu, 2014. "Rethinking New Venture's Cognitive Legitimacy: An Experimental Study," Systems Research and Behavioral Science, Wiley Blackwell, vol. 31(3), pages 437-446, May.
    • Handle: RePEc:bla:srbeha:v:31:y:2014:i:3:p:437-446
    DOI: 10.1002/sres.2281
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    References listed on IDEAS

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    Cited by:

    1. Lortie, Jason & Cox, Kevin C. & Roundy, Philip T., 2022. "Social impact models, legitimacy perceptions, and consumer responses to social ventures," Journal of Business Research, Elsevier, vol. 144(C), pages 312-321.

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