Pick The Odd-Ones Out! Conferring Legitimacy Of Initial Coin Offerings By Distinction
Muhammad Nauman Shahid & Jungpil Hahn
Proceedings of the 42nd International Conference on Information Systems (ICIS 2021)
Can standing apart actually help a new venture gain legitimacy? Studying 306 ICOs across 29 market categories, this research shows that being distinctive can strengthen a venture's legitimacy when its audience values novelty. The findings challenge the conventional assumption that young ventures must closely resemble established players to gain acceptance and attract resources.
This study challenges the conventional optimal-distinctiveness assumption that deviation from category prototypes necessarily undermines organizational legitimacy. Using data from 306 ICOs across 29 market categories, the study applies topic modeling to identify the content of entrepreneurial narratives and quantify their deviation from category prototypes. The findings indicate that greater narrative distinctiveness can enhance resource acquisition among novelty-seeking audiences, supporting the argument that distinctiveness may constitute a source of normative legitimacy rather than merely a liability to cognitive legitimacy. The study further examines the role of online media in shaping this relationship.