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Can certification help incumbent firms?

  • Bin LiuEmail author
  • Qingtao Wang
Article
  • 15 Downloads

Abstract

Are noncompulsory certifications persistently beneficial for incumbent firms across responsive subjects and across time in emerging institutions, given that they are likely to be conducive for start-ups suggested in prior studies? By exploring in emerging economy context with one cross-sectional and another longitudinal dataset of firms in China, we invoke legitimacy-based view to develop a concept named as institutional consciousness and find out distinctive effects of resource acquisitions from the public versus the government caused by noncompulsory certifications. Specifically, they on average only provide benefits toward achieving higher sales but trivial in obtaining subsidies whereas the two effects reverse from earlier years to late years when incorporating the temporal effects. This produces significant implications for entrepreneurs to acknowledge the distinguished roles of noncompulsory certifications to the different targets while enriches the legitimacy view of the significance of business strategies. The study further introduces a new perspective to disentangle the paradox of embedded agency issue in institutional changes while reminds the importance to treat the government as an organizational actor instead of fixed condition.

Keywords

Noncompulsory certification Institutional theory Cognition Emerging economies Resources Dynamics China 

Notes

Acknowledgements

We sincerely thank APJM SI editors David Ahlstrom, Mike Peng, Weilei Shi, Li Sun, Yuli Zhang, two anonymous reviewers and participants at APJM SI conference in Nankai University. We also thank Prof. Gongming Qian for his insightful comments.

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Authors and Affiliations

  1. 1.Department of ManagementChinese University of Hong KongShatinHong Kong
  2. 2.Department of MarketingCity University of Hong KongKowloonHong Kong

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