The interplay of affirmative action and entrepreneurial culture: Understanding institutional privilege and exclusion in Malaysia

The aim of this article is to examine how enterprise policies aimed at supporting ethnic groups influence entrepreneurial activity. Drawing on qualitative interviews with entrepreneurs and policymakers in the emerging economy of Malaysia, we show that policy intended to close interethnic gaps in entrepreneurial activity instead serves to increase differences. Parallel institutional environments are formed through socially negotiated accomplishments and are influenced by institutional antecedents including affirmative action policy. These conditions created advantages (institutional privilege) for the targeted population but disadvantages (institutional exclusion) for those who are not targeted in the preferential policies. Tensions between privilege and exclusion impact on entrepreneurial activity, increasing inequalities of different parties. The article provides a number of theoretical contributions and practical implications for policy.