The role of network density and betweenness centrality in diffusing new venture legitimacy: an epidemiological approach

James M. Bloodgood (), Jeffrey S. Hornsby (), Matthew Rutherford () and Richard G. McFarland ()
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James M. Bloodgood: Department of Management, College of Business Administration
Jeffrey S. Hornsby: University of Missouri–Kansas City
Matthew Rutherford: Oklahoma State University
Richard G. McFarland: ESSEC Business School

International Entrepreneurship and Management Journal, 28 pages

Abstract: Abstract To survive and grow, new ventures must establish initial legitimacy, and subsequently diffuse this legitimacy through a given population. While the notion of initial legitimacy has received substantial attention in the recent literature, diffusion has not. This work endeavors to outline the legitimacy diffusion process via drawing parallels with the field of epidemiology. Ultimately, to effectively diffuse legitimacy (and grow) a firm must gain positive judgments of appropriateness from members of a given network. Importantly, as with diseases, the characteristics of the network are critical to the diffusion process. A relatively dense network is posited to invoke a normative evaluation process by its members, and can be difficult for new ventures to access, but subsequent diffusion of new venture legitimacy can be rapid. A less dense network, on the other hand, is posited to invoke a pragmatic evaluation process by its members, and is likely easier for new ventures to access initially, but may result in lower levels of new venture legitimacy diffusion in the long run. Theoretical and practical implications are discussed.

Keywords: Legitimacy; Diffusion; Network density; Epidemiology; Betweenness centrality; Legitimacy threshold (search for similar items in EconPapers)
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DOI: 10.1007/s11365-016-0412-9

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