negative industry evaluations. As discussed below, this can cause multicollinearity problems in the models that include all the media coverage variables. An interesting correlation is the one found between the variables Worldwide Internet host growth rate and the volume of the general media coverage and the volume of positive industry evaluation. The corresponding correlations are negative indicating that while the usage of internet grows, the level of media coverage of this industry decreases, suggesting that industry growth may serve as a surrogate for the taken-for- grantedness aspect of legitimacy. The parameter estimates listed under model 1 in Table 2 depict all the control variables used in the study that account for demographic, economic, and technological factors that might influence market category entry rates, and provide a baseline for the rest of the statistical models. Among the control variables, only the local residential population and economic environment variables produced significant results, while growth rate of the size of the Internet was never significant in any model. When significant, the signs of the parameter estimates were in the expected directions. 4.1. Testing hypothesis 1—A general media coverage model of entry rates The second model in Table 2 reports the estimates for the model used to test Hypothesis 1; Hypothesis 1 stated that the cognitive legitimacy evident from the level of general media coverage of an industry positively affects the entry rate of companies within a new market category. The parameter estimate for the general media coverage variable was positive and significant in its influence on entry rates (p<0.01), demonstrating the legitimating effect the volume of communication and information transmission within the industry has on founding and entry rates in a new market category.
negative industry evaluations. As discussed below, this can cause multicollinearity problems in the models that include all the media coverage variables. An interesting correlation is the one found between the variables Worldwide Internet host growth rate and the volume of the general media coverage and the volume of positive industry evaluation. The corresponding correlations are negative indicating that while the usage of internet grows, the level of media coverage of this industry decreases, suggesting that industry growth may serve as a surrogate for the taken-for- grantedness aspect of legitimacy. The parameter estimates listed under model 1 in Table 2 depict all the control variables used in the study that account for demographic, economic, and technological factors that might influence market category entry rates, and provide a baseline for the rest of the statistical models. Among the control variables, only the local residential population and economic environment variables produced significant results, while growth rate of the size of the Internet was never significant in any model. When significant, the signs of the parameter estimates were in the expected directions. 4.1. Testing hypothesis 1—A general media coverage model of entry rates The second model in Table 2 reports the estimates for the model used to test Hypothesis 1; Hypothesis 1 stated that the cognitive legitimacy evident from the level of general media coverage of an industry positively affects the entry rate of companies within a new market category. The parameter estimate for the general media coverage variable was positive and significant in its influence on entry rates (p<0.01), demonstrating the legitimating effect the volume of communication and information transmission within the industry has on founding and entry rates in a new market category.
JBV-D-11-00226%20Legitimacy%20of%20new%20categories%202012-05-08%20submission.docx