Abstract:

While prior research suggests that legitimacy advantages enable mature firms to accumulate resources and maintain long-term orientations, the influence of temporal pressures remains underexplored. Drawing on institutional isomorphism and institutional change literature, we introduce the concept of temporal isomorphism, whereby organizations under accelerated timing norms pursue renewed legitimacy by conforming not only in what they act, but also in when and how quickly they act. Specifically, we propose that temporal isomorphism destabilizes cumulative legitimacy, thereby driving mature firms toward systematic short-term orientations. This tendency intensifies when firms operate under legitimacy deficiency structures like family control in China. While firms may seek to decouple these pressures through political connections or capital market exposure, the effectiveness of such strategies varies by their legitimacy sources. For older firms, capital market exposure provides relief whereas political connections do not; for larger firms, these effects reverse. Using panel data from 3,077 publicly listed firms in China between 2008 and 2022, our findings support these arguments. By uncovering the institutionalized temporal foundations of short-termism among mature firms, this study reconceptualizes short-termism as an outcome of temporal alignment. It extends institutional theory by establishing temporality as a distinct dimension of isomorphic conformity, and reveals how legitimacy sources shape firms’ capacity to navigate accelerating institutional demands in a transitional economy.

Please choose your submission type: Full Paper

Primary Track: Sustainable and Responsible Business

Keywords: responsible business

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Dr. Xinrui Zhang