DOI

10.1007/s11187-026-01246-z

Author ORCID Identifier

    Ileana Maldonado-Bautista: https://orcid.org/0000-0002-3444-7690

Abstract

We introduce the concept of entrepreneur political ideology divergence, defined as the absolute ideological distance between an entrepreneur’s political ideology and that of the respective state governance. Building on organizational research on political ideology and strategic risk management reasoning, we argue that political ideology divergence heightens entrepreneurs’ perceptions of regime uncertainty and legitimacy threats, prompting entrepreneurial firm-level responses. Specifically, we theorize and find that entrepreneurial firm engagement in environmental, social, and governance (ESG) practices functions as a strategic outcome, that is, a response entrepreneurs use to manage political ideology divergence. Using longitudinal data on 605 entrepreneur-led firms operating in the United States (U.S.) from 2010 to 2020, we find that greater political ideology divergence is associated with increased entrepreneurial firm engagement in ESG practices. We also find that entrepreneurs moderate this relationship by deploying complementary strategies, namely, using research and development (R&D) investment and lobbying to manage political divergence, thereby attenuating entrepreneurial firm engagement in ESG practices. This study contributes to research on the political economy of entrepreneurship by shifting attention from institutional constraints to entrepreneurial agency when exploring how entrepreneurs interpret and strategically respond to political ideology divergence.

Document Type

Article

Publication Date

7-1-2026

Publisher Statement

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

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