An analysis of new venture performance: Linking product innovation and legitimation

Abstract

This research examined how competitive and institutional factors jointly affect young firms f performance. More specifically, the study investigated the relationships among new ventures f different types of abilities to introduce new products, abilities to manage internal and external contexts, the characteristics of institutional environment, and firm performance. Although young firms f abilities to carry out innovation and to secure organizational legitimacy have been recognized as important variables to explain entrepreneurial outcomes, their joint impacts have not been fully explored. Moreover, strategic and institutional perspectives have yielded conflicting arguments. While the former emphasizes the distinctiveness to obtain competitive advantage, the latter highlights the alignment with institutional environment to gain social acceptance by synthesizing strategic and institutional perspectives, the model was developed and tested with a sample of 300 young companies in various manufacturing industries across the U.S.