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Entrepreneurial Market Leadership Claims, Cultural Resonance, and Investor Evaluations in Nascent Markets: The Goldilocks Effect
Journal article   Open access   Peer reviewed

Entrepreneurial Market Leadership Claims, Cultural Resonance, and Investor Evaluations in Nascent Markets: The Goldilocks Effect

Xiumei Li, Jade Y. Lo, Derek Harmon and V. K. Narayanan
Journal of management studies, Forthcoming
26 Nov 2025
url
https://doi.org/10.1111/joms.70037View
Published, Version of Record (VoR) Open

Abstract

Business & Economics Management Business Social Sciences
Cultural entrepreneurship research emphasizes entrepreneurs' use of cultural resources to influence audience evaluations through resonance. However, the process by which such cultural resonance is achieved remains underexplored, particularly as an intermediary outcome. We investigate how cultural resonance may be attained by focusing on entrepreneurs' use of a prevalent cultural resource in nascent markets: market leadership claims. Incorporating insights from social psychological research, we propose that the frequency of these claims becomes an important prompt in triggering investors' cognitive processing and affects the attainment of cultural resonance. Specifically, we theorize a 'Goldilocks effect': a venture's increased claiming frequency initially enhances resonance with investors, resulting in more favourable evaluations, but excessive claims reduce it, resulting in less favourable evaluations. Using a multimethod approach comprising an archival study and an experiment, we find support for our theory. These findings offer new insights into research on cultural entrepreneurship, discursive strategy, and nascent market strategies.

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UN Sustainable Development Goals (SDGs)

This publication has contributed to the advancement of the following goals:

#9 Industry, Innovation and Infrastructure
#1 No Poverty
#5 Gender Equality

Source: SDGs in the Output

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business
Management
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