Social E.S Paper

7/24/2019 Social E.S Paper

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Impact of socio economiconditions on Social

entrepreneurship



Introduction

Instead of focusing solely on nancial value creaentrepreneurship centers on the creation of socidisenfranchised members of society

To date, little attention has focused on understa

macro-level factors that inuence the occurrencentrepreneurship rms



Introduction

Social entrepreneurs are one species of entrepreneur” (Dees et al, !"##, p !$ entrepreneurship founders are utili%ing both for-proprot organi%ational forms (To&nsend and 'art, !"#

oth social and commercial entrepreneurship add)uestions about the discovery, evaluation and e*opportunities and the set of individuals &ho engaactions (Shane and +enataraman, !"#!$, andproducts and services to gain nancial sustaDomenico et al, !"##$



Introduction

little research has e*amined the impact of Seconomic factors has on social venture crea

.uch of the research has not fully e*plainedcauses of dierences in nations and none, tono&ledge, addresses the impact of social a

economic variables on social entrepreneursh



Introduction

The impact of these variables is crucial to ounderstanding, since there are signicant chto producing and mareting products and sethe base of the economic pyramid, such as and incomplete marets, uctuating prices a

unreliable or absent infrastructure, and &eaabsent formal governance (Thompson and .!"#/$



Introduction

The purpose of this research is to incorporatdemand- and supply-side theories of entrepthat analy%e ho& Socio economic variables

social entrepreneurship activity



Research Question.

0Do certain macro-level and micro-level inuincluding specic social and economic factoStimulate the emergence of social entrepren



Literature Review

Thornton (!"#"$ has e*tended this perspectintegrating the supply-side perspective (&hefocus is primarily on the individual$ to compand enhance our understanding of rm creaargues for a sociological frame&or, &here

institutional and ecological theories and mumodels can be used to integrate the t&o schthought



Literature Review

2ther researchers have similarly proposed the iof social and ecological economy ob3ectives, incframe&or for green community entrepreneurshdevelopment (4liedt and 5arer, !"#/$

6ompany7s and .c.ullen (!"#/$ revie&ed man

theories that incorporate both the demand- andside perspectives and argued that there are t&oand emerging schools of thought regarding thedevelopment of any entrepreneurial activity, incsocial venture creation

(#$ The economic school8

(!$ The social school



Social inuences

The social school emphasi%es the role of soc

structures in dening the attractiveness ofparticipating in entrepreneurial activities

.ee et al (!"#"$ proposed that social normsignicant role in ne& rm creation, and thadecentrali%ed institutions that are socially d

as &ell as more centrali%ed ones developed government, are critical to venture developm

Sullivan (!"#9$ reported that governmental oered by cities promoted such socialentrepreneurship &ithin communities



Social inuences

Social legitimacy refers to the process by &hstaeholders, the general public, ey opinionor government o:cials accept a venture asappropriate and right, given e*isting norms a(;ldrich and <iol, #==9$,

based on a reframing of ecological and instittheories, emerging rms can develop legitimemploying strategies such as organi%ing collemareting and lobbying eorts (;ldrich and <



Social inuences

+arious formal and informal inuences on cohave also been investigated, and closed socnet&ors, particularly &ithin transitional ecotend to be associated &ith greater corruptiohigher 4D5 is lined to lo&er corruption (Ton

al, !"#"$



Economic inuences

The economic school contends that the attracsocial entrepreneurship e*ists as a result of th0information about material resources in socie(6ompanys and .c.ullen, !"#/, p /"#$ and teconomic conte*t of entrepreneurial opportun

In a study of the formal and informal factors tpromote social entrepreneurial activity, <erri a(!"#"$ asserted that governments have a rolefostering the entrepreneurial dynamism of the



Economic inuences

Their results sho&ed that public spending ?

the payments of subsidies, grants, social bethe lie ? has a negative impact on socialentrepreneurship, indicating that lo&er levee*pense may discourage individuals from evconsidering social entrepreneurial activity athe economy7s entrepreneurial potential (<e

>rbano, !"#"$ In a study by 4liedt and 5arer (!"#/$, gree

community entrepreneurship &as driven by government funding and a related maret cresidential energy audits, &hile it &as facilite*ternal social capital net&or o&s, humanstocs and strategic partnerships



Economic inuences

+an 5utten and 4reen (!"#"$ found that during a rsuch as the one e*perienced beginning in !""@, faincluding lo& cost of silled labor, cheaper supplieincentives, technology and social net&ors increasof entry into social entrepreneurship

Aecent &or has suggested that partnerships are c

the emergence and success of nonprot and for-prventures, and that they are more important for socoperating in developing regions characteri%ed by ginstitutional constraints, such as ;frica, ;sia and Ba(.eysens and 6arsrud, !"##$



Economic inuences

Social entrepreneurs can more eectively address social ilconte*ts by partnering &ith governments and other institu!""=$

Aesearchers have also proposed that hybrid structures in ne& ventures enable properties of social capital embeddedrm to form eective international maret channels and delong-term performance (erg et al, !""C$



Research model

SocialEntrepreneurship

Social FactorsEconom

Facto



Hypothesis

There is signicant relationship bet&een social factor and entrepreneurship

There is signicant relationship bet&een social entrepreneeconomic factors



Discussion of variables

e utili%e the method employed by 4ri:ths et al (!""=a$,measure is operationali%ed using the inde* developed by TInternational, &ho ran the level of government corruptio

(roadman and Aecanatini$ nd the same broad social andcausalities in a study of transition economies, as do most gcountry studies (eg D3anov et al, $, ie that corruption tdecline &ith economic development, strengthening of demprocesses and, to some e*tent, greater openness of trade




ender e)uality is introduced for t&o principal reasons <irationally e*pect that increases in the labor force &ould readditional (social$ entrepreneurial activity

Second, ilson and Eicul (!""F$ found that females intereentrepreneurial careers are more liely than males to be msocial aspects than by economic motives

.ales interested in entrepreneurship are more liely to be the lure of nancial success than by the social aspects ofentrepreneurship




Gconomic and social motives are not, ho&ever, mutually e*ilson and Eicul (!""F$ contend that young &omen &ant nancially, but appear un&illing to do this at the e*pense oa positive dierence, maing them a po&erful source of fuentrepreneurship that &ill have both social and economic vat its core

In a study of per capita incomes and levels of corruption, 0

statesH 0Aich countries are perceived to be less corrupt tha'ence, &e employ 4D5 per capita to control for &ealth lecompetitiveness and the allocative e:ciency of the nation




Sullivan and Sholniov (!"#9$ contend that, among other corruption leads to misallocation of resources, a lac of coand e:ciency, lo&er public revenues for essential goods alo&er productivity and lo&er levels of innovation, lo&er groprivate sector employment rates

2vasa and Sobel (!"#!$ nd no signicant impact on the ne& ventures per #""" inhabitants, &hile both 5arer and

(!"##$, and <isman and Sarria-;llende (!"#!$ nd that entincreases &ith increasing levels of 4D5




<inally, to pro*y for the availability of crucial start!up funpotential social entrepreneurial ventures, &e employ the nsavings rate as a measure of the availability of capital in th4iven the crucial need for such funds, it is not surprising thdeveloped countries have small business nancing program

6iting the benets of a more entrepreneurial labor mar#egovernments and other macro-economic actors around the

instituted programs to foster entrepreneurship




Despite evidence to the contrary (Davis et al, !"##$, it is othat small entrepreneurial ventures create a disproportiona

3obs in the economy

Bong (!"#!$ generally conclude that higher federal ta$ rhigher rates of self-employment

The e*planation for this result usually rests on the assumpta* rates drive &orers out of paid employment, or &age 3oentrepreneurial ventures &here they can more easily avoidta*es



6onclusion

The future for social entrepreneurship abounds &ith many and innovations to eectively address, and potentially solvsociety7s most intractable problems resulting from maret government inade)uacies or failures

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Social E.S Paper