The effect of perceived legitimacy on new venture growth in Japan: a moderated mediation approach

Abstract

PurposeThis article seeks to theorize and empirically examine the conditional mechanisms through which entrepreneurial legitimacy determines the success or failure of new ventures by building upon Zimmerman and Zeitz's (2002) causal process model of legitimacy.Design/methodology/approachWe gathered cross-sectional data from 266 Japanese new venture owners running their businesses across a variety of sectors and empirically examined whether, how and when legitimacy positively affects new ventures' performance by employing the SPSS PROCESS macro for moderated mediation analysis.FindingsThe results indicate that rich access to a pool of valuable resources fully mediates the positive effects of legitimacy on new venture growth. Furthermore, this study offers robust empirical evidence that prior entrepreneurial experience and competitive intensity as the internal and external contingency factors significantly moderate the indirect effect of legitimacy on new venture growth through resource accessibility.Research limitations/implicationsAlthough our analysis provides clear support for the view that important resources for new venture performance are gained through legitimacy, it does not offer precise clarifications for the type and sources of legitimacy and for the strategies that could be deployed to achieve legitimacy. Future studies should clearly distinguish tangible assets (e.g. financial resources) from intangible assets (e.g. tacit knowledge, networks and reputation) in terms of resource accessibility. Therefore, it should be worth scrutinizing the multiple dimensions of resources as potential mediators of the legitimacy-new venture growth relationship in greater depth.Practical implicationsFrom a policy perspective, this study suggests that a special emphasis needs to be placed on designing and carrying out policies aimed at increasing the visibility and credibility of entrepreneurship as a positive career path since public acceptance of entrepreneurship is essential to new venture growth. Furthermore, it is logical to conclude that achieving greater legitimacy is a pivotal strategic tool not only to overcome resource barriers but also to maximize a probability of survival, specifically for those entrepreneurs without prior experience and those operating in a fiercely competitive market environment.Originality/valueUnlike previous studies that have mostly presented the direct effect of entrepreneurial legitimacy on venture outcomes (Capelleras et al., 2019; Kibler and Kautonen, 2016; Pindado and Sánchez, 2017), our research empirically identified the potential complexities inherent in this relationship by performing a conditional indirect effect analysis.

Legitimacy-building role of incubators: a multiple case study of activities and impacts of business incubators in a developing Chinese city

“…In general, our findings support the "visibilityenhancing" perspective of incubators, showing that incubators can help new ventures to address the legitimacy challenge by raising their visibility in the entrepreneurial ecosystem through the linkages that the incubator has developed by networking with external stakeholders (Lasrado et al, 2016;van Weele et al, 2019) . However, our findings provide little support for the resource-based proposition that incubators help incubatees to overcome the legitimacy challenge by facilitating access to entrepreneurial resources offered by external stakeholders (McAdam and McAdam, 2008;Bruneel et al, 2012;Kawai et al, 2020).…”

“…As for the third question, our evidence shows that, overall, few business incubators in Chongqing perform regular activities such as financing, training and coaching, which are well-documented in mainstream literature (Bruneel et al, 2012). The existing literature, which predominantly focuses on the Western context, asserts that business incubators have ample and mature linkages to various entrepreneurial resources such as universities, research institutions, and investors (Lasrado et al, 2016;van Weele et al, 2019;Mian et al, 2016;Kawai et al, 2020). However, such linkages are incomplete in our sample.…”

“…This position allows incubators to bridge the gap between tenants and their external environment, such that the networks established by business incubators provide tenants with preferential access to a variety of resources, including potential customers, suppliers, technology partners and investors (Bergek and Norrman, 2008). The external resources that incubators provide can help tenants to overcome resource deficiencies and thereby address the legitimacy challenge that many new ventures typically face (McAdam and McAdam, 2008; Bruneel et al , 2012; Kawai et al , 2020). Also, inputs provided by the external partners of incubators, such as image and reputation, can raise the credibility and visibility of any new venture in an incubator (Lasrado et al , 2016; van Weele et al , 2019).…”

Dimensiones de la legitimidad organizativa en función del género y el estatus de los consumidores

“…Cualquier tipo de empresas, ya sean nuevas empresas (Kawai et al, 2020), PYMES (Huang-Horowitz y Evans, 2020), grandes empresas, nacionales o internacionales (e.g. Bolzani et al, 2020;Fenglu, 2009), privadas o públicas (e.g.…”

“…En el mundo actual empresarial donde la competitividad es alta y los recursos escasos, las organizaciones luchan por hacerse con los mayores recursos económicosfinancieros, humanos, etc. que permitan la supervivencia de la misma (Kawai et al, 2020;Song et al, 2021;Yang et al, 2020). Las empresas deben conseguir ser aceptadas por los stakeholders, como clientes, proveedores, empleados, inversores, medios de comunicación, el Estado y la sociedad en general, para sobrevivir.…”