WHO WALKS THE TALK? VENTURE CAPITAL FUNDS’ ACTIONS AFTER SYMBOLIC SELF-REGULATION OF LIMITED AND GENERAL PARTNERS

This paper investigates if organizations use symbolic self-regulation to escape from normative pressure without complying in practices. I argue that, when an explicit regulatory environment does not support self-regulation initiatives, opportunistic organizations might reduce their efforts to conform to the normative ideals through real actions. The ‘walking of the talk’, which is the implementation of actions that go beyond symbolic response, might also be discouraged by alternative means to obtain organizational legitimacy such as an organization’s reputation and status. These hypotheses are tested on a sample of venture capital (VC) funds whose limited and general partners might have voluntarily decided to join the United Nations’ Principles of Responsible Investment (UNPRI) initiative. Empirical findings show that VC funds’ likelihood to invest in clean technology companies decreases when one of the fund’s stakeholders (i.e. general or limited partners) joins the UNPRI initiative. Results also suggest that this effect is conditional upon the reputation and status of the VC fund.