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Building entrepreneurial inter-firm networks in an emerging economy: the role of cognitive legitimacy

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Abstract

We take an organizational legitimacy perspective and use data from a large-scale nationally representative study on the state of small business in Saudi Arabia, in order to explore the antecedents to the formation of entrepreneurial ventures’ inter-firm networks in the context of an emerging economy (n = 331). We argue that entrepreneurial ventures need to overcome a threshold of cognitive legitimacy in order to develop inter-firm ties with a diverse set of large, established firms. Results indicate that having a written business plan and a formal organizational structure are positively associated with the diversity of the new venture’s inter-firm network, while the education level of the entrepreneur does not have a significant effect. In addition, the effect of having a formal organizational structure is stronger for younger ventures. Implications are discussed.

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Notes

  1. It should be noted that, as Zimmerman and Zeitz (2002) acknowledge, it is sometimes difficult to distinguish (especially empirically) between normative and cognitive legitimacy. Thus, Suchman (1995) classified personal, structural, and procedural legitimacy (in addition to consequential legitimacy) as forms of moral (or normative) legitimacy. Similarly, Ruef and Scott (1998) considered managerial and technical legitimacy as forms of normative legitimacy. In our study, we follow Zimmerman and Zeitz (2002) and Khaire’s (2010) conceptualizations, as they provide a clearer manifestation of cognitive legitimacy as being “understandable” (Shepherd and Zacharakis 2003). We are indebted to an anonymous reviewer for bringing our attention to these alternative classifications.

  2. We are indebted to the two anonymous reviewers for encouraging an expanded discussion of the boundaries and limitations of our study.

  3. We are indebted to an anonymous reviewer for this insight.

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Authors and Affiliations

  1. Entrepreneurship Chair, King Saud University, P.O. Box 7695, Riyadh, 11472, Saudi Arabia

    Wafa N. Almobaireek & Ahmed A. Alshumaimeri

  2. Bentley University, 175 Forest St., Waltham, MA, 02452, USA

    Tatiana S. Manolova

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  1. Wafa N. Almobaireek
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Almobaireek, W.N., Alshumaimeri, A.A. & Manolova, T.S. Building entrepreneurial inter-firm networks in an emerging economy: the role of cognitive legitimacy. Int Entrep Manag J 12, 87–114 (2016). https://doi.org/10.1007/s11365-014-0322-7

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