Market Mediators and the Tradeoffs of Legitimacy-seeking Behaviors in a Nascent Category

• In Event: 307 - Regular Session. Economic Sociology: Markets, Movements, Metrics of Evaluation

Abstract

This study contributes to a growing body of research on the emergence and growth of new product market categories by focusing attention on market intermediaries and their role in garnering legitimacy for a nascent market category. Although extant research has demonstrated the importance of attaining legitimacy for new market categories, few have considered the tradeoffs associated with such actions. Using the U.S. organic food product category as a context, we explore how one type of market intermediary—a standards-based certification organization—sought to balance the expansion of a nascent market category with retaining its distinctive coherence and identity. Our findings suggest that standards-based certification organizations can expand a market and demarcate clear categorical boundaries, but at a cost to the initial collective identity of the category’s members. Our findings hold important implications for the literatures on legitimacy, new category formation and growth, market intermediaries, and movement-driven markets.

Authors

• Brandon H. Lee, University of Melbourne

• Shon Hiatt, University of Southern California

• Michael D. Lounsbury, University of Alberta