<span>We examined the nexus of entrepreneurial illegality and firm performance in an emerging market by investigating the extent to which antecedent conditions such as economic constraints, bureaucratic demands, institutional pressures and entrepreneurial agency increase the supply of illegal opportunities exploited by entrepreneurs for private gains. Using 2009 World Bank Enterprise Survey data of 2599 small and medium-sized entrepreneurial enterprises (SMEEs) in Nigeria, we demonstrate that illegal entrepreneurial behaviors in developing markets ? specifically bribery and tax evasion - affect firm performance measured by sales and employment growth. </span><span>Results show that illegal opportunities significantly increase with bureaucratic and regulatory intervention in entrepreneurial activities, suggesting current policies in developing countries that seek to deter bribery and tax evasion through enlargement of government oversight may exacerbate illegal entrepreneurial behavior. Our findings also suggest that in Nigeria, where probability of detection and severity of punishment are low, the benefits of illegal business behavior outweigh potential costs and, in fact, accrue cost-free to the entrepreneur, thus normalizing illegality as an entrepreneurial ?best practice.?Doctorate of Management Programs</span>
