Investigating Entrepreneurial Venture Resource Acquisition through the Lens of Media Dynamics

Abstract

There is growing evidence that negative media coverage leads to positive resource outcomes in entrepreneurial ventures, which contradicts established organizational reputation theory. Drawing on reputational prominence, the reputational Matthew Effect, as well as the extensive literature on CEO power dynamics, we first examine the extent to which negative media coverage is positively related to entrepreneurial venture resource access. We then assess how CEO power moderates entrepreneurial venture resource outcomes through reputational prominence accruement, reputation transfer, and media platform dynamics. We test our theoretical arguments with a dataset of 4.3 million traditional media articles on 301 entrepreneurial ventures and venture CEOs, along with 400 thousand venture CEO tweets, retweets, and related digital trace metadata. Our results clarify the reputational resource effects of organization-level reputational prominence accruement through the lens of CEO power dynamics, extend the Matthew Effect to entrepreneurial ventures, and outline a reputational “forgiveness effect”.