Institutional logics and legitimacy strategies of fintech entrepreneurs in developing markets; the case of Pakistan

FinTech ventures in emerging markets must navigate institutional voids while securing legitimacy within fragmented and evolving regulatory landscapes. While existing research highlights FinTech’s disruptive potential, less attention has been paid to how legitimacy is strategically constructed through multi-actor engagement amid competing institutional logics. This study examines how FinTech entrepreneurs in Pakistan respond to the intersecting demands of state, market, technological, and social value logics, while engaging regulators and intermediary organizations. Based on 17 in-depth interviews, we develop a legitimation model identifying three interrelated pathways – regulatory alignment, disruptive innovation, and inclusive innovation – through which entrepreneurs combine strategic conformity, policy engagement, and norm-challenging practices, often supported by third-sector organizations that broker relationships across institutional domains. Our findings extend institutional theory by introducing the concept of distributed hybridity to reveal how legitimacy in under-institutionalized contexts is collaboratively constructed, contested, and leveraged to enable inclusive innovation. The study offers new insights into FinTech evolution in emerging economies, where policy fluidity and socio-economic need shape entrepreneurial action.