Necessity is the Mother of Isomorphism: Poverty and Market Creativity in Panama

Sociology of Development, Forthcoming

Posted: 11 Mar 2016

See all articles by Laura Doering

Laura Doering

University of Toronto - Rotman School of Management

Date Written: September 21, 2015

Abstract

Does poverty hinder or encourage market creativity? Businesses that offer novel, creative products have greater growth potential than businesses that conform to market norms. Yet the literature offers conflicting views on the relationship between poverty and market creativity. Some research suggests poverty restricts entrepreneurs’ capacity to offer novel products, whereas other work suggests poverty facilitates creativity in the marketplace. This paper addresses that tension by examining the shifting relationship between poverty and market creativity across stages of business development. Drawing on survey and interview data from Panama, this paper shows how entrepreneurs are both catalyzed and constrained by conditions of poverty. Poor individuals actively generate novel venture concepts in the early stages of business development. In later stages, however, they struggle to sustain those novel businesses. Ultimately, poverty limits entrepreneurs’ capacity to profit from the creativity they bring to the marketplace. This paper elucidates the dual relationship between poverty and creativity, and helps explain why economic mobility via self-employment proves elusive for the poor.

Keywords: entrepreneurship, poverty, migration, household resources

JEL Classification: M13, I32, O16

Suggested Citation

Doering, Laura, Necessity is the Mother of Isomorphism: Poverty and Market Creativity in Panama (September 21, 2015). Sociology of Development, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2746419

Laura Doering (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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