Green to Gone? Regional Institutional Logics and Firm Survival in Moral Markets

Siddharth Vedula (), Jeffrey G. York (), Michael Conger () and Elizabeth Embry ()
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Siddharth Vedula: Entrepreneurship Research Institute, Technical University of Munich, 85748 Garching Bei München, Germany
Jeffrey G. York: Leeds School of Business, University of Colorado Boulder, Boulder, Colorado 80309
Michael Conger: Miami University, Oxford, Ohio 45056
Elizabeth Embry: Leeds School of Business, University of Colorado Boulder, Boulder, Colorado 80309

Organization Science, 2022, vol. 33, issue 6, 2274-2299

Abstract: A growing body of scholarship studies the emergence of moral markets—sectors offering market-based solutions to social and environmental issues. To date, researchers have largely focused on the drivers of firm entry into these values-laden sectors. However, we know comparatively little about postentry dynamics or the determinants of firm survival in moral markets. This study examines how regional institutional logics—spatially bound, socially constructed meaning systems that legitimize specific practices and goals within a community—shape firm survival in emerging moral markets. Using a unique panel of firms entering the first eight years of the U.S. green building supply industry, we find that (1) a regional market logic amplifies the impacts of market forces by increasing the positive impact of market adoption and the negative impact of localized competition on firm survival, (2) a regional proenvironmental logic dampens the impacts of adoption and competition on firm survival, and (3) institutional complexity—the co-occurrence of both market and proenvironmental logics in a region—negates the traditional advantages of de alio (diversifying incumbent) firms, creating an opportunity for de novo (entrepreneurial entrant) firms to compete more effectively. Our study integrates research on industry emergence, institutional logics, and firm survival to address important gaps in our knowledge regarding the evolution and growth of environmental entrepreneurship in moral markets.

Keywords: entrepreneurship; social responsibility; sustainability/corporate environmentalism; culture; strategy; organization and management theory; institutional theory; organizational ecology (population ecology); organizational identity and identification (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:33:y:2022:i:6:p:2274-2299

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