Effects of affiliate reputation on resource attraction in new firms

What is it about?

We show that new firms’ resource attraction trajectories are shaped by their affiliates in more complex ways than past research has accounted for. Specifically, we show that two groups of resource providers respond differently to new firms’ affiliations in accordance with differences in the groups’ abilities to recognize and interpret reputation-related signals. Moreover, within a single group of resource providers, distinct characteristics of the affiliate exert different influences.

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Why is it important?

Our study enriches the reputation-borrowing literature by linking it more fully with the more complex and nuanced understanding of reputation that is emerging within contemporary reputation research. In addition, by showing that new firms’ affiliations influence the attraction of both human and financial resources over time, we expand the range of resource-attraction outcomes generally considered in the reputation-borrowing literature.