Beyond simple embeddedness: probing entrepreneurs’ strategic religious engagement

In developing economies where formal institutions are weak, religious institutions can serve as critical sources of legitimacy and resources for entrepreneurs. Yet entrepreneurs with similar religious affiliations exhibit markedly different patterns of engagement with these institutions, a puzzle current theory inadequately explains. Drawing on social identity theory, we examine how entrepreneurs’ motivational identities shape distinct patterns of religious engagement using two-wave survey data from 246 religious small business owners in Nicaragua. We find that respect-seeking entrepreneurs pursue religious institutional involvement for its visibility and status-conferring opportunities, while communitarian entrepreneurs leverage religious networks for tangible resources. Gender moderates these relationships: the positive effect of communitarian motivation on resource acquisition effectively disappears for women. However, regular church attendance nearly fully offsets this gender penalty, with female communitarian entrepreneurs who attend regularly showing resource acquisition levels approaching those of their male counterparts. Our findings contribute to the identity-based literature on religious entrepreneurship by demonstrating that motivational identities, not just religious identities, systematically shape how entrepreneurs engage with religious institutions. We reveal religious engagement as a multifaceted, identity-driven strategic practice, with church attendance functioning as a legitimizing mechanism enabling women to convert formal piety into social capital.