Mobilizing under uncertainty: Political identification, resource activation, and technology adoption among necessity entrepreneurs

Abstract

How does political identification shape entrepreneurial action in the wake of a major policy shock? We investigate this question using survey data from 294 necessity entrepreneurs following India's 2016 demonetization—a disruptive policy that promoted digital payment technologies as a state-endorsed solution. We examine technology adoption as an entrepreneurial response to institutional uncertainty, focusing on how political identification shapes the mobilization of financial and human capital. We find that entrepreneurs aligned with the ruling party were more likely to activate their resources and adopt digital payment technology. By illustrating how identity-driven cognition reduces perceived ambiguity in opportunity evaluation and promotes entrepreneurs' willingness to act, this study offers new insights into entrepreneurial action under institutional uncertainty.