Does Social Legitimacy Matter in an Indian’s Decision to Start a New Venture?

From Journal of Entrepreneurship and Innovation in Emerging Economies

The role of entrepreneurship in economic development is evident as it fuels  growth, innovation and wealth creation in an economy. High levels of entrepreneurship have provided most developed countries with an edge in the global marketplace. That is why nascent entrepreneurs are supported at various levels by countries, governments and academic institutions.

Even though understanding and promoting entrepreneurship can be a boon for developing countries, most studies investigating entrepreneurial behaviour have been conducted in  western contexts. Researchers suggest  that more research should be conducted across several regions and countries to have a broad and in-depth understanding of conditions, characteristics, motivations for firm creation in various contexts (Thomas & Mueller, 2000).

In many studies conducted in India, the scope has been much narrower with an interest in specific aspects of entrepreneurship. For instance, studies by Arafat and Saleem (2017) and Arafat et al. (2019) focused on female  entrepreneurship. These studies found that women are now more empowered to do business, receive more family support and show more confidence in doing business than  in the past (Arafat et al., 2020a). However, the authors also hinted that female  entrepreneurship is challenging,  due to a lack of appropriate training and male dominance in society. Many studies have focused solely on scientists (STEM), claiming that young scientists and those with higher levels of human capital are more likely to initiate new ventures (Arafat et al., 2022). However, Hussain et al. (2022) and Arafat et al. (2021a) focused on university students. Studies on students limit generalisation of findings because they do not reflect ‘real world’ practice and experience. Some other studies have also measured the influence of intellectual capital on start-up behaviour (Arafat et al., 2020c; Khan et al., 2019a, 2020).

Other researchers have examined the link between market orientation and performance in India. It appears that  research on this area is diverse and eclectic; therefore, it lacks the depth and pursuance of  more extensive and longitudinal studies. It would appear that specifically, from the Indian  context, there is an inadequate body of literature which could  help generalisation of key concepts and  what factors influence business start-ups for adults in India. Therefore, the present study is an attempt to address this gap. In this study, the researchers explore the factors that influence the individuals’ perceptions about starting a new business. This study examines the start-up behaviour from the lens of institutional theory (social legitimacy) and trait theories (entrepreneurial personality). Understanding the importance of social legitimacy in entrepreneurial behaviour in emerging economies, particularly in collectivist societies, can bring insights to entrepreneurial researchers and policymakers. 

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