A paradox of embedded agency: Sustainable investors boundary bridging to emerging fields

Abstract

This study provides additional insight into the paradox of embedded agency through an examination of investors' interests in sustainable business. According to the paradox, although actors are embedded in institutional fields, they may become agents of change. This research adds to existing literature by examining how varying degrees of embeddedness may affect change behaviors. In addition, this research considers the latter in a new venture investment context that: 1) distinguishes between individual, organizational, and hybrid organizational investor types, 2) perceives investors in a mature field crossing over to engage in or “boundary bridging” to emerging fields related to new industries and other mature fields, and 3) conceptualizes a change agent role as a mixed coalition of leaders and supporters rather than a single autonomous actor. By examining investors’ various roles in sustainable entrepreneurship, contributions are also made to the literature on sustainable entrepreneurship. Empirical tests of hypotheses use negative binomial regression analyses on a sample of 186 Crunchbase listed firms. Results find that the lead investors who choose sustainable start-ups over information technology start-ups are change agents, sometimes in syndicate coalitions that include other supportive embedded investors having differing motivations.