Does big data utilization improve firm legitimacy?

Drawing on the resource-based view, we examine how big data use impacts firm legitimacy. Using a panel dataset of the Chinese firms over the period 2012-2019, our Tobit instrumental variable regression results show a positive impact of big data on firm legitimacy. In particular, we find that an increase of one point in big data utilization is associated with a probability of 27.4 % increase in firm legitimacy. This effect is found stronger for firms in highly competitive industries. This study contributes to the nascent literature on big data and sheds light on how firms can take advantage of data-driven insights to manage the organizational environment.