Legitimacy vacuum, structural imprinting, and the first mover disadvantage

Abstract

Unfavorable conditions at founding may result in consistently lower survival chances for new firms. We focus on the effect of market entry in the early years of an industry, when clarity about the form and function of a new category of firms is lacking. This population-level legitimacy vacuum effect not only adversely affects the fates of new entrants in an emerging industry but also becomes imprinted in their organizational structures and persists even as the industry matures. These ideas are integrated with received theory in organizational ecology and help to extend broader notions of structural imprinting and first mover advantage in organization and management theory.