Low-income logics: institutions' varying impact on entrepreneurship

Abstract

PurposeThe authors address the role that income plays in allowing individuals to resist dominant institutional norms and engage in entrepreneurship.Design/methodology/approachThis is a conceptual article that develops propositions about the relationship of institutional logics and income level with opportunity entrepreneurship.FindingsThe authors suggest that high-income individuals are less impacted than low-income individuals by institutional logics that do not support opportunity entrepreneurship. More specifically, the positive effects of a national business system that reflects and replicates market logics within a society have a greater impact on the proclivity to pursue opportunity entrepreneurship of low-income individuals than those with high incomes.Social implicationsPolicymakers addressing poverty need to understand that examining the overall societal impact of institutions is not enough. Weak institutions have a disproportionately negative impact on low-income individuals. In addition to critical resources, the accessibility of market logics is key.Originality/valueThis study is the first in the entrepreneurship domain to theorize how and why institutions matter more for low-income individuals. This occurs via two mechanisms: (1) market logic accessibility and (2) the degree to which institutionalized market logics decrease opportunity cost. In so doing, this study contributes to the literature on embedded agency within the institutional logic perspective.

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