I solemnly swear that I am up to no good: The Deviant Origins of Valuing Entrepreneurship

Abstract

Research at the nexus of institutional theory and entrepreneurship has not considered whether and how deviance impacts entrepreneurship. I argue that deviance will foster greater entrepreneurial activity in social contexts where entrepreneurship is not valued (or where traditional employment models are more valued). As deviance increases, a local culture develops which yields higher social value for entrepreneurship as a career path in two ways. First, it leads to valuing behaviors commonly associated with an entrepreneurial orientation: Risk-taking, experimentation, independent thinking. Second, a stronger deviant local culture is more supportive of entrepreneurship as a career path because a deviant subcultures view entrepreneurship as disrupting the economic status quo of the dominant cultural system of wider society. Thus, increasing aggregate levels of deviance should lead to increases in entrepreneurial activity. I test this argument using longitudinal data on all 2448 municipalities in Mexico. The results, and a series of robustness checks, confirm my hypotheses.