Date of Award

Summer 8-27-2021

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Entrepreneurship and Emerging Enterprises

Advisor(s)

Minniti, Maria

Keywords

Asymmetric information, Entry, Legitimacy, Licensing, Online reviews, Working-class industries

Subject Categories

Business | Entrepreneurial and Small Business Operations

Abstract

Entrepreneurs benefit significantly from being perceived as legitimate during the venture creation process. The strategies they use to obtain legitimacy, however, change contingent on costs. Importantly, available strategies have the power to influence entrepreneurs' decisions to exploit perceived opportunities and enter the market. Within this context, I investigate the relationship between regulative legitimacy and entry. The findings from my research suggest a nuanced relationship between regulative legitimacy and entry. Specifically, my results suggest that licensing, a common type of regulative legitimacy, may not lower information asymmetries, and that its ultimate effect on entry may be contingent on its costs, and on the presence of alternative sources of legitimacy (cognitive and normative). My results also suggest that the presence of online platforms, where entrepreneurs can interact publicly with their stakeholders, may provide a viable alternative to regulative legitimacy. Indeed, I show the availability of online reviews to provide a strategic alternative to regulative legitimacy, thereby calling into question the value firms and their stakeholders receive from licensing. Finally, my results provide evidence that newly available legitimacy-building strategies, such as online reviews, may lower the likelihood that unlicensed entrepreneurs will apply for a license. Thus, in addition to contributing to the entry and legitimacy literatures, my work has significant implications for policy makers interesting in the design and value of licensing requirements.

Access

Open Access

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