1932

Abstract

Growing interest in the role of business entities in addressing social problems highlights the potential of social enterprises—organizations that cover all or most of their costs through revenue-generating business and have an objective to address a societal problem. A social enterprise can be an efficient and effective way to create social value by internalizing externalities, exploiting complementarities with commercial activities, providing better prices or quality to disadvantaged customers, and reducing the need for scarce philanthropic support. The challenges of managing an organization for financial success and social impact may limit their potential. Social enterprises can be for-profit or nonprofit organizations. The legal and institutional structure of for-profit and nonprofit governance and financing makes it challenging for a social entrepreneur to find a business model and organization structure to succeed.

Loading

Article metrics loading...

/content/journals/10.1146/annurev-economics-082222-075249
2023-09-13
2024-10-12
Loading full text...

Full text loading...

/deliver/fulltext/economics/15/1/annurev-economics-082222-075249.html?itemId=/content/journals/10.1146/annurev-economics-082222-075249&mimeType=html&fmt=ahah

Literature Cited

  1. Alexander F, Hamermesh LA, Martin FR, Monhait NM. 2014.. M&A under Delaware's public benefit corporation statute: a hypothetical tour. . Harv. Bus. Law Rev. 4:(2):25580
    [Google Scholar]
  2. Austin DA. 2019.. Economics of federal user fees. Congr. Res. Serv. R45463, Congr. Res. Serv., Washington, DC:
    [Google Scholar]
  3. Bakija J. 2013.. Tax policy and philanthropy: a primer on the empirical evidence for the United States and its implications. . Soc. Res. Int. Q. 80:(2):55784
    [Google Scholar]
  4. Banerjee AV. 2013.. Microcredit under the microscope: What have we learned in the past two decades, and what do we need to know?. Annu. Rev. Econ. 5::487519
    [Google Scholar]
  5. Bebchuk LA, Tallarita R. 2020.. The illusory promise of stakeholder governance. . Cornell Law Rev. 106::91177
    [Google Scholar]
  6. Belton V, Stewart TJ. 2002.. Multiple Criteria Decision Analysis: An Integrated Approach. Amsterdam:: Kluwer
    [Google Scholar]
  7. Berrey E. 2018.. Social enterprise law in action: organizational characteristics of U.S. benefit corporations. . Trans. Tenn. J. Bus. Law 20::21114
    [Google Scholar]
  8. Besley T, Ghatak M. 2005.. Competition and incentives with motivated agents. . Am. Econ. Rev. 95:(3):61636
    [Google Scholar]
  9. Besley T, Ghatak M. 2017.. Profit with purpose? A theory of social enterprise. . Am. Econ. J. Econ. Policy 9:(3):1958
    [Google Scholar]
  10. Brickley JA, Van Horn RL. 2002.. Managerial incentives in nonprofit organizations: evidence from hospitals. . J. Law Econ. 45:(1):22749
    [Google Scholar]
  11. Broughman B, Fried J, Ibrahim D. 2014.. Delaware law as lingua franca: theory and evidence. . J. Law Econ. 57:(4):86595
    [Google Scholar]
  12. Carter NM, Gartner WB, Shaver KG, Gatewood EJ. 2003.. The career reasons of nascent entrepreneurs. . J. Bus. Ventur. 18:(1):1339
    [Google Scholar]
  13. Cassar L, Meier S. 2018.. Nonmonetary incentives and the implications of work as a source of meaning. . J. Econ. Perspect. 32:(3):21538
    [Google Scholar]
  14. Choi AH. 2015.. Nonprofit status and relational sanctions: commitment to quality through repeat interactions and organizational choice. . J. Law Econ. 58:(4):96393
    [Google Scholar]
  15. Cull R, Demirguc-Kunt A, Morduch J. 2009.. Microfinance meets the market. . J. Econ. Perspect. 23:(1):16792
    [Google Scholar]
  16. De Quidt J, Ghatak M. 2018.. Is the credit worth it? For-profit lenders in microfinance with rational and behavioral borrowers. . Ann. Public Coop. Econ. 89:(1):175200
    [Google Scholar]
  17. Dees JG. 2001.. The meaning of social entrepreneurship. Unpublished manuscript, Duke Univ., Durham, NC:
    [Google Scholar]
  18. Dessein W, Garicano L, Gertner R. 2010.. Organizing for synergies. . Am. Econ. J. Microecon. 2:(4):77114
    [Google Scholar]
  19. Dinerstein M, Opper IM. 2022.. Screening with multitasking. NBER Work. Pap. 30310
    [Google Scholar]
  20. Doerr J. 2018.. Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. New York:: Portfolio/Penguin
    [Google Scholar]
  21. Dorff MB, Hicks J, Solomon SD. 2021.. The future or fancy? An empirical study of public benefit corporations. . Harv. Bus. Law Rev. 11:(1):11358
    [Google Scholar]
  22. Drucker P. 1990.. Managing the Non-Profit Organization: Practice and Principles. New York:: Harper Collins
    [Google Scholar]
  23. Duggan M. 2000.. Hospital ownership and public medical spending. . Q. J. Econ. 115:(4):134373
    [Google Scholar]
  24. Duggan M. 2003.. Hospital market structure and the behavior of not-for-profit hospitals. . RAND J. Econ. 33:(3):43346
    [Google Scholar]
  25. Eggleston K, Shen Y, Lau J, Schmid CH, Chan J. 2008.. Hospital ownership and quality of care: What explains the different results in the literature?. Health Econ. 17:(12):134562
    [Google Scholar]
  26. Einav L, Finkelstein A, Mahoney N. 2022.. Producing health: measuring value added of nursing homes. NBER Work. Pap. 30228
    [Google Scholar]
  27. Fehr E, Fischbacher U. 2002.. Why social preference matter—the impact of non-selfish motives on competition, cooperation and incentives. . Econ. J. 112:(478):C133
    [Google Scholar]
  28. Fink L. 2018.. A sense of purpose. . Harvard Law School Forum on Corporate Governance, Jan. 17
    [Google Scholar]
  29. Fink L. 2022.. The power of capitalism. . BlackRock. https://www.blackrock.com/us/individual/2022-larry-fink-ceo-letter
    [Google Scholar]
  30. Gine X, Mansuri G, Shrestha SA. 2022.. Mission and the bottom line: performance incentives in a multigoal organization. . Rev. Econ. Stat. 104:(4):74863
    [Google Scholar]
  31. Glaeser EL. 2003.. Introduction. . In The Governance of Not-for-Profit Organizations, E Glaeser , pp. 144 Chicago:: Univ. Chicago Press
    [Google Scholar]
  32. Glaeser EL, Shleifer A. 2001.. Not-for-profit entrepreneurs. . J. Public Econ. 81:(1):99115
    [Google Scholar]
  33. Hansmann H. 1980.. The role of the nonprofit enterprise. . Yale Law J. 89::835901
    [Google Scholar]
  34. Hansmann H. 1996.. The Ownership of Enterprise. Cambridge, MA:: Harvard Univ. Press
    [Google Scholar]
  35. Hart O, Shleifer A, Vishny RW. 1997.. The proper scope of government: theory and an application to prisons. . Q. J. Econ. 112:(4):112761
    [Google Scholar]
  36. Holmstrom B, Milgrom P. 1991.. Multitask principal-agent analyses: incentive contracts, asset ownership and job design. . J. Law Econ. Organ. 7:(Spec. Issue):2452
    [Google Scholar]
  37. Hubbard TN. 1998.. An empirical examination of moral hazard in the vehicle inspection market. . RAND J. Econ. 29:(2):40626
    [Google Scholar]
  38. Jin GZ, Leslie P. 2003.. The effect of information on product quality: evidence from restaurant hygiene grade cards. . Q. J. Econ. 118:(2):40951
    [Google Scholar]
  39. Karlan D, Osman A, Zinman J. 2021.. Dangers of a double-bottom line? A poverty targeting experiment misses both targets. . J. Econ. Manag. Strategy. https://doi.org/10.1111/jems.12450
    [Google Scholar]
  40. Khanna T, Rangan VK. 2005.. Narayana Hrudayalaya Heart Hospital: cardiac care for the poor (A). HBS Case 505-078 , Harv. Bus. Sch., Cambridge, MA:
    [Google Scholar]
  41. Kim S, Schifeling T. 2016.. Varied incumbent behaviors and mobilization for new organizational forms: the rise of triple-bottom line business amid both corporate social responsibility and irresponsibility. Unpublished manuscript, Johns Hopkins Univ., Baltimore, MD:
    [Google Scholar]
  42. Levine R, Rubinstein Y. 2017.. Smart and illicit: Who becomes an entrepreneur and do they earn more?. Q. J. Econ. 132:(2):9631018
    [Google Scholar]
  43. Levitt SD, List JA. 2007.. What do laboratory experiments measuring social preferences reveal about the real world?. J. Econ. Perspect. 21:(2):15374
    [Google Scholar]
  44. Lowenstein MJ. 2017.. Benefit corporation law. . Univ. Cincinnati Law Rev. 85:(2):38194
    [Google Scholar]
  45. Mair J. 2020.. Social entrepreneurship: research as disciplined exploration. . In The Nonprofit Sector: A Research Handbook, ed. W Powell, P Bromley , pp. 33357 Stanford, CA:: Stanford Univ. Press, 3th ed.
    [Google Scholar]
  46. Malani A, Philipson T, David G. 2003.. Theories of firm behavior in the nonprofit sector: a synthesis and empirical evaluation. . In The Governance of Not-For-Profit Organizations, ed. E Glaeser , pp. 181216 Chicago:: Univ. Chicago Press
    [Google Scholar]
  47. McMillan Doolittle. 2020.. Banking on B corps. . McMillan Doolittle, Aug. 10
    [Google Scholar]
  48. Miller TL, Grimes MG, McMullen JS, Vogus TJ. 2012.. Venturing for others with heart and head: how compassion encourages social entrepreneurship. . Acad. Manag. Rev. 37:(4):61640
    [Google Scholar]
  49. Morduch J. 1999.. The microfinance promise. . J. Econ. Lit. 37:(1):56914
    [Google Scholar]
  50. Mosley J. 2020.. Social service nonprofits: navigating conflicting demands. . In The Nonprofit Sector: A Research Handbook, ed. W Powell, P Bromley , pp. 25170 Stanford, CA:: Stanford Univ. Press, 3rd ed.
    [Google Scholar]
  51. Murray JH. 2014.. Social enterprise innovation: Delaware's public benefit corporation law. . Harv. Bus. Law Rev. 4:(2):34572
    [Google Scholar]
  52. O'Regan K, Oster S. 2005.. Does the structure and composition of the board matter? The case of nonprofit organizations. . J. Law Econ. Organ. 21:(1):20527
    [Google Scholar]
  53. Oster S. 1998.. Executive compensation in the nonprofit sector. . Nonprofit Manag. Leadersh. 8:(3):20721
    [Google Scholar]
  54. Pauly M, Redisch M. 1973.. The not-for-profit hospital as a physician's cooperative. . Am. Econ. Rev. 63:(1):8799
    [Google Scholar]
  55. Roomkin MJ, Weisbrod BA. 1999.. Managerial compensation and incentives in for-profit and nonprofit hospitals. . J. Law Econ. Organ. 15:(3):75081
    [Google Scholar]
  56. Rose-Ackerman S. 1996.. Altruism, non-profits, and economic theory. . J. Econ. Lit. 34:(2):70128
    [Google Scholar]
  57. Shahidinejad A. 2022.. Are (nonprofit) banks special? The economic effects of banking with credit unions. PhD Diss. , Univ. Chicago, Chicago:
    [Google Scholar]
  58. Sharfman BS. 2021.. The illusion of success: a critique of Engine No. 1's proxy fight at ExxonMobil. . Harv. Bus. Law Rev. Online 12::3
    [Google Scholar]
  59. Stout L. 2008.. Why we should stop teaching Dodge v. Ford. . Va. Law Bus. Rev. 3:(1):16490
    [Google Scholar]
  60. Yunus M, Jolis A. 2003.. Banker to the Poor: Micro-Lending and the Battle Against World Poverty. New York:: PublicAffairs
    [Google Scholar]
/content/journals/10.1146/annurev-economics-082222-075249
Loading
  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error