Abstract
While much research has studied industry emergence, how a nascent industry confronts the established institutions is poorly understood. Recent institutional analyses have made strides along the cognitive and normative dimensions of institutions, but how entrepreneurial action relates to the regulative dimension is underexplored (Sine & David, 2010). I seek to fill these gaps by studying how a nascent industry project navigates the regulatory structure. Drawing on archival analysis of the permitting process (2001-2011) of the Cape Wind project, the first offshore wind energy project proposed in the United States, I found that structural misalignment between the new realities offered by this nascent industry and the existing regulatory structure constitutes a barrier to industry emergence. Such misalignment, in the forms of a regulatory thicket and a void, underlay how the general public and the permitting agencies differed in their project evaluations. Based on the findings, I propose a framework, consisting of two competing rationalities (science and social justice) and orientations (benefits-seeking and detriments-averse), for mapping the new opportunities and challenges presented by the nascent industry vis-à-vis the regulatory structure. This paper contributes to institutional theory by studying industry emergence in relation to regulative institutions. It also contributes entrepreneurship studies by showing how institutions may condition entrepreneurial action and how gaps in the existing regulations herald unleveraged opportunities for entrepreneurship.
Published Version
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