Enabling Entrepreneurship within Virtual Worlds: Theorizing the Role of Governance and Culture

Recent times are witnessing the emergence of entrepreneurship within virtual worlds (VWs). Although, VWs offer opportunities for entrepreneurial activities, their use for such activities is rather limited. We posit that the lack of an internal governance framework within VWs, specifying the rights, duties, responsibilities and obligations for its different stakeholders is limiting the growth of entrepreneurial endeavors within VWs. In this research-in-progress paper, grounding our study in literature on governance and trust, we propose a legitimate governance framework (LGF) for fostering user trust in VWs – as past research has shown that user trust may be the key for entrepreneurial ventures. Further, because VWs are highly diverse and multi-cultural in nature, we examine if the proposed LGF in VW would be equally effective across different cultures. Specifically, we theorize the moderating influence of the three cultural value dimensions: power distance, uncertainty avoidance and individualism/collectivism on the relationship between the proposed LGF and user trust in VWs. We plan to test the proposed hypotheses through a combination of survey method and interviews with VW entrepreneurs. The study, by integrating the role of governance and culture in VWs, is expected to contribute to the literature on entrepreneurship in VWs.