This dissertation advances a legitimacy perspective to enable us to understand and examine the profound effects of winning a prestigious award on firms’ unethical behaviors and firm innovation. While earlier research on awards or prizes has found that awards have important implications for recipients and neighbors, there is a lack of attention on the relationship between awards and related community members’ strategic choices and behaviors. Building on institutional theories of legitimacy, I argue that winning a prestigious award has important implications for the legitimacy of the subfield, which further affects firm behaviors. The context of this dissertation is Chinese scientist Youyou Tu’s Nobel Prize win in Physiology or Medicine 2015, for her discovery of artemisinin, resulting from her research related to traditional Chinese medicine (TCM). First, I argue that the enhanced legitimacy of a subgroup in the industry due to a prestigious award can lead firms in that subfield to commit fewer acts of bribery because increased legitimacy can bring more resources to these firms and the need for bribery as an alternative channel for acquiring resources is reduced. In the context of Youyou Tu’s Nobel Prize win in 2015, where the use of TCM was emphasized, I find empirical support for my theoretical hypotheses, as the results reveal that, compared with firms focusing on Western medicines, TCM firms have tended to commit fewer acts of bribery since the announcement of the Nobel Prize win. I also demonstrate that factors affecting the supply and demand of bribery, including state ownership, firm profitability, regional marketization, and regional nationalism, could moderate the impact of the Nobel Prize win on a firm’s tendency to commit bribery. Second, I examine the relationship between the Nobel Prize win and firm innovation outcomes from a legitimacy perspective. I argue that a prestigious award such as the Nobel Prize can enhance the cultural-cognitive legitimacy of a subgroup in an industry, such that they can obtain knowledge and resources for innovation activities. As a result, these firms are more likely to achieve innovative outcomes. I find that, compared with firms focusing on Western medicine, TCM firms are more innovative, reflected by patents after the Nobel Prize announcement in 2015. Further, this effect is stronger if the TCM firm has leaders with shorter tenures and receives less public search attention since, under these conditions, the firm is less conservative and aims to better leverage the opportunities brought about by Nobel Prize to become even more innovative. Overall, this dissertation makes important contributions to the literature on legitimacy, firm ethics, firm innovation, and awards and prizes. Keywords: Nobel Prize; legitimacy; unethical behaviors; firm innovation; traditional Chinese medicine.