How Do Institutional Carriers Alleviate Normative and Cognitive Barriers to Regulatory Change?

Abstract

How do we reconcile misalignments between a system’s existing normative and cognitive elements and novel regulatory change? Prior work either largely focuses only on regulatory change or analyzes normative and cognitive barriers in parallel to rather than in interaction with regulatory change. Moreover, the institutional entrepreneurship literature that focuses on reconciling such misalignments is predominantly centered on the tactics of entrepreneurs rather than the support provided by institutional carriers. We, therefore, use the case of the Chinese Academy of Sciences (CAS) Knowledge Innovation Program (KIP) to better understand these neglected facets of institutional change. Through a mixed methods approach, we posit and find support for two key mechanisms that support regulatory change. First, institutional carriers (e.g., CAS institutes) clarify the market relevance of technical knowledge, linking cognitive support to regulatory change. Second, institutional carriers (e.g., science parks) create shared standards that could not occur otherwise, linking normative support to regulatory change. Finally, these changes to institutions seem particularly associated with more nascent clusters. Our study contributes to studies at the nexus between institutional change and entrepreneurship by highlighting the role of linking cognitive and normative support to regulatory changes aimed at increasing entrepreneurship.