Such politicians are highly likely to aim to maintain job creation and regional development ( Acs and Armington 2006) through the establishment and growth of ventures. 2015) and maintaining their power, than promoting capitalism values, such as achieving economic efficiency ( Yun et al. Under China’s state capitalism economic system, owing to the strong influence of the existing socialism that has yet to fade, politicians are more interested in sustaining socialist values across socio-political arenas, such as reducing the unemployment rate ( Musacchio et al. In recent years, numerous ventures have been established in China owing to the government-led policy to establish ventures ( White et al. Factors influencing the growth of ventures in the transition economy-economies that have been converted from state-centered socialism to state capitalism that embraces elements of market but still sustains a socialism legacy-have received relatively minimal attention from researchers ( Li and Hitt 2006). However, these studies have been mostly based on the Western capitalist economy and are less likely to consider ventures’ crisis situations, such as the COVID-19 pandemic. 2002).įindings of prior studies have considerably expanded our understanding of the influence of various internal and external factors of ventures on venture growth. 2019) (2) the particular features of founders, such as educational level ( Sapienza and Grimm 1997) and entrepreneurial origin ( Barbosa and Faria 2020) (3) entrepreneurial attitudes and goals, such as entrepreneurs’ passion ( Baum and Locke 2004) and entrepreneurial and market orientation ( Song and Jing 2017) and (4) industrial characteristics, such as environmental complexity and dynamism ( Cavazos et al. 2001 West and Noel 2009), and management of these resources (e.g., Wang et al. 2006): (1) resources that ventures have obtained and developed, such as financial, human, and technological resources (e.g., Cardon 2003 Lee et al. Factors influencing the growth of ventures mainly include, but are not limited to ( Baum et al. To date, several studies have explored the various antecedents on sustainable venture growth ( Baum et al. The COVID-19 pandemic has also resulted in difficulty for new ventures to gain sufficient resources from external stakeholders to realize sustainable growth. The COVID-19 pandemic is having an adverse effect on the world economy, causing governments to globally limit people’s daily lives ( Aruga et al. This study provides comprehensive understanding and practical implications on Chinese ventures’ legitimation strategies for venture growth during crises. Findings show that Chinese ventures with or without repeat entrepreneurs can actively utilize various sets of legitimation mechanisms to acquire legitimacy and necessary resources from Chinese state audiences for venture growth during adversity. We conduct a survey and analyze data from 107 entrepreneurs of Chinese technology ventures during the COVID-19 pandemic. This study applies the fuzzy-set qualitative comparative analysis method to take a configurational approach and identify multiple concurrent causality of legitimacy mechanisms on venture growth. In addition, we consider serial entrepreneurship as a contextual factor affecting the effectiveness of causal effects. Based on the understanding of particular contexts of Chinese state capitalism and the COVID-19 pandemic, we examine how various sets of a venture’s identity, associative, and organizational mechanisms influence venture growth during crises in China. Furthermore, we discuss that access to necessary resources for venture growth is limited during crises. To offer a context-specific perspective of Chinese ventures’ legitimation strategies, we discuss that under Chinese state capitalism, these ventures need to follow lingering socialist values, such as equality and social stability, to be recognized as appropriate business operations by state audiences. This study builds upon the venture growth literature and venture legitimation mechanisms and investigates how venture firms in China can acquire legitimacy and necessary resources from state stakeholders for venture growth during the COVID-19 pandemic.
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