Can certification help incumbent firms?
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Can certification help incumbent firms? Bin Liu 1
& Qingtao
Wang 2
# Springer Science+Business Media, LLC, part of Springer Nature 2019
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
Do incumbent firms really need certifications from governments if those are not mandated? Contrary to the start-ups that desire feasible endorsements from credible stakeholders to overcome the liability of newness to enhance their funding, public recognition, as well as legitimacy (Ahlstrom & Bruton, 2001; Armanios, Eesley, Li, & Eisenhardt, 2017; Lounsbury & Glynn, 2001; Newman, Schwarz, & Ahlstrom, 2017; * Bin Liu [email protected] Qingtao Wang [email protected]
1
Department of Management, Chinese University of Hong Kong, Shatin, Hong Kong
2
Department of Marketing, City University of Hong Kong, Kowloon, Hong Kong
B. Liu, Q. Wang
Zimmerman & Zeitz, 2002), it is expected that mature firms should be less likely to do so since they have relaxed concerns over those hurdles (Carlos & Lewis, 2018). Though studies conducted in developed regions have suggested that incumbent firms are inclined to hide their granted certifications in case of unfavorable situations (Carlos & Lewis, 2018), firms in emerging economies are continually enthusiastic (The Paper, 2018). Thus, investigating this intriguing phenomenological difference of incumbent firms could supplement the omissions of institutional significance in certification studies since previous emphasized start-ups are more or less likely to have the universal demands of endorsements. Stemming from prior work (Sine, David, & Mitsuhashi, 2007) while incorporating the noncompulsory aspect of certification, we herein define the noncompulsory cer
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