Theorizing piratical innovation: regulatory illegitimacy and firm growth

Daniel Nunan, MariaLaura Di Domenico

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This article examines the growing phenomenon of firms in “winner takes all” markets who adopt business models that prioritize exceptional levels of growth over other financial metrics. Often this growth results in firms breaking with regulatory norms, despite regulatory legitimacy being theorized as essential for resource acquisition in small firms. The article explores this apparent paradox. We propose piratical innovation as a firm‐level process built upon disrupting regulatory norms in a way that avoids negative legitimacy judgments. Extending labeling theory, we develop a conceptual model where piratical innovation blends a range of symbolic and substantive actions to enable these firms to maintain legitimacy among stakeholders, even when growth is underpinned by illegitimate acts. We conclude by considering the wider applicability of piratical innovation as a model for small firm growth, and the consequences for other firms which must compete against such innovations.
    Original languageEnglish
    Article number0
    Pages (from-to)0
    Number of pages18
    JournalJournal of Small Business Management
    Volume0
    Early online date24 Sep 2018
    DOIs
    Publication statusEarly online - 24 Sep 2018

    Keywords

    • firm growth
    • regulatory illegitimacy
    • piratical innovation
    • labelling contest

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