The emergence of the broadband Internet access market: The impact of cognitive and sociopolitical legitimacy on market entry and density



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Texas Tech University


Building on the literature in the fields of population ecology and institutional theory, this dissertation attempts to extend our understanding of how legitimacy contributes to the creation of new organizational populations. Aldrich and Fiol (1994) observed that a fundamental problem facing innovators and entrepreneurs in nascent industries is the lack of legitimacy of new technologies, firm strategies, and organizational forms which could be used to obtained needed resources and support. Population ecologists have observed that both legitimacy and competition, operationalized as first and second order forms of the population density, affect the pattern of organizational foundings. Since the measurement of legitimacy and competition depends on the presence of a population's density, existing research has focused on established organizational populations rather than emergent ones. Less attention has been directed to examining the processes related to the creation of a future new organizational population, even before the first organization is founded (e.g., development and testing of new technologies, prospecting for investors, lobbying of government regulators, etc.). This study combines a traditional population ecology approach (the use of population density as a representation of legitimacy) with a content analysis approach which examines both cognitive and sociopolitical dimensions of legitimacy using news media-based measures. Both the density-dependent measures of legitimacy and competition as well as media-based measures of cognitive and sociopolitical legitimacy were combined in a model of market entry in the broadband Internet access provider industry in Texas from 1993 to early 2000. Despite the fast pace of development of the Internet as a valuable information, entertainment, and commercial resource, the methods used to provide access to it confinue to develop and evolve; their legitimacy continues to develop as consumers, incumbent and start-up telecommunications companies, investors, and regulators learn about, use, and promote new technologies. The study found significant support for both the density-dependent measures of legitimacy and competition as well as the media-based measures of cognitive and sociopolitical legitimacy, demonstrating the complex nature of the influence of legitimacy on foundings as well as its role in the emergence of new organizafional populations.



Market segmentation, Internet service providers -- Texas, Broadband communication equipment industry