The Power of Public Competition: Promoting Cognitive Legitimacy Through Certification Contests

This paper suggests that a challenge for activists in new industries is to promote cognitive legitimacy while at the same time proving the reliability of the radically new product in question. One way for activists to simultaneously legitimate the form and create a platform for claims of quality to be made is to organize certification contests, where producers are ranked on the basis of their performance. A study of how consumer activists organized reliability and speed races in the early American automobile industry during 1893-1912 is offered to show action was essential to legitimate the automobile. In the empirical analyses, I study how the number of certification contests influenced two entrepreneurial outcomes; incorporation and operational start-up rates. By focusing attention on whether certification contests enabled potential founders, defined as entrepreneurs possessing a prototype, to incorporate new ventures, and initiate production, this paper directs attention how legitimation influences the selection of emerging organizations.