Which Kinds of Legitimacy is Important?

Although legitimacy has been identified as a vital issue for firms, existing literatures of legitimacy for firms mainly focus on one stage in their life cycle. To this end, this article applies the theory of cooperate life cycle to explore what the proper legitimacy that firms should obtain to increase their performance at their development stages. The authors develop a research model and run an empirical test on 496 IT firms. The results show that cognitive legitimacy, normative legitimacy, and regulative legitimacy play different roles across the life cycle of firms. The authors also find that proper strategy at the three stages in firms' life cycle can help them acquire and enhance the appropriate legitimacy. Furthermore, the proper legitimacy will help firms improve their performance. The findings are proved in a case study on 58.com, a leading classifieds information provider in China. This article makes contributions to management literature by extending the theory of legitimacy for firms and providing guidelines for firms to obtain the proper legitimacy at each stage of their life cycle.