Abstract
An information-theoretic model of the legitimacy construct is proposed. A measure called ‘language consistency’ is derived from this model and operationalized using data from thirteen years of trade journal articles on the biotechnology industry. This measure is then related to the trading volume of a representative portfolio of biotech stocks. Findings indicate that language consistency and trading volume have a joint (positive) causal influence on each other over the long term; however, brief language inconsistencies are also predictive of transient spikes in trading volume. I argue that these results are consistent with contemporary theories of institutional influence and with findings in economic sociology related to categorical legitimacy.
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