Entrepreneurial Strategies in Extractive Environments

Entrepreneurs operating outside of developed markets often face heightened risks of expropriation. However, the strategies by which they can reduce said risk remained under-examined and undertheorized. This abductive study attempts to address this void through the analysis of a novel historical dataset--2734 cases of individuals who were prosecuted as "speculators and profiteers" in Maoist China. With this data, we show that, even in the most extreme of contexts, entrepreneurs can effectively reduce the severity of expropriation by either embedding themselves in political institutions or availing themselves of incongruencies in enforcement priorities across different levels of government. These findings have broader implications for understanding the relationship between entrepreneurs and the state, as well as strategic decision-making in emerging market and authoritarian contexts.