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Legal Resonance: How Restrictive Laws Shape Market Entry in Stigmatized Industries
About the Research
Prior research has generally concluded that market entry flourishes when regulatory frameworks are less restrictive. However, some stigmatized industries have experienced a surge of new businesses despite highly restrictive legalization frameworks. To explain this puzzle, we introduce the concept of legal resonance—the alignment between the restrictiveness of laws legalizing a stigmatized industry and prevailing moral beliefs in the local environment. Specifically, we argue that restrictive legalization frameworks, which include strong accountability procedures, confer moral approval to the industry by ensuring regulatory oversight and emphasizing the industry’s benefits. These restrictions resonate better (or worse) when prevailing moral beliefs in the local environment are more (less) conservative. Using state-level data from medical marijuana legalization (2016-2020), our findings show that restrictive frameworks requiring patient registration led to the establishment of dispensaries more in conservative states than in liberal states. This refines our understanding of how legalization influences market entry, demonstrating the crucial role of legal resonance after the legalization of a stigmatized industry.
About Ana Aranda
Ana M. Aranda is an assistant professor in the Strategy & International Business Section of the Amsterdam Business School at the University of Amsterdam. She earned her PhD from Tilburg University. Her research explores the role of regulations and social evaluations in controversial industries, using various methods such as topic modeling. Her work has been published in leading academic journals, including the Academy of Management Journal, Organization Science, the Journal of Management, and Organization Studies.
Date: Thursday 10 April, 2025
Time: 12:45-14:15 CEST
Venue: Room Roland Calori (B3), (Zoom link provided to registered attendees)
Reminder: We no longer provide food as per school policy…
Should you want to attend, please register at https://forms.gle/rYxqPmw7cZsCrsHU8
