Partners in Crime: Code Violation and Preservation Between Category Insiders and Outsiders

• In Event: 118 - Section on Economic Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 03. Cognition, Categories and Contesting Categories

Abstract

The aim of this study is to analyze category insider-outsider relationships with respect to code preservation and violation. Whereas code preservation defends existing domain, code violation seeks to challenge. We show there exists a trade-off between authenticity segregation and competitive threat for insiders when responding to code violation by outsiders. Thus, the probability of insiders to pursue code-violating changes exhibits a u-shaped relationship to the pervasiveness of code-violation amongst outsiders. This relationship is moderated by code preservation of outsiders. At low rates of outsider code preservation, the probability of insiders to pursue code-violating changes exhibits a u-shaped relationship to the pervasiveness of code-violation amongst outsiders. At high rates of outsider code preservation, the relationship is positive curvilinear. We find code preservation efforts to increase the competitive threat in a category and reduce authenticity segregation between insiders and outsiders. We use data from 152 Islamic banks worldwide from year 1999 to 2014.

Authors

• Maima Aulia Syakhroza, University of Cambridge

• Lionel Paolella, University of Cambridge

• Kamal Munir, University of Cambridge