Identifying Cross-Country Key Drivers of Social Entrepreneurial Activity

Governmental and philanthropic efforts alone are not sufficient to eradicate poverty. The world needs new frameworks that enable sustainable development by integrating the economic, social and environmental dimensions, and social entrepreneurship is of great interest because it has the capacity for facilitating societal change by fostering innovative ways to address social inequality, unemployment, and climate change. Precisely because social entrepreneurship lays at the intersection of the business and nonprofit worlds, it is a complex phenomenon, and there are many unknowns regarding how the convergence of these dimensions can be understood and managed at cross-national levels. To investigate this phenomenon, this study used a mixed-methods sequential explanatory design to investigate the correlates of social entrepreneurship among a sample of 55 countries for which sufficient data existed. Specifically, regression analysis was first used to identify the significant socioeconomic factors that explained variation in social entrepreneurial activities both broadly and narrowly defined; then, through in-depth individual interviews with government officials and focus groups composed of social entrepreneurs, the study explored how the quantitative findings manifested in the social entrepreneurial activities in Colombia and Mexico. Results from the regression analysis revealed the existence of different correlates for the broad and narrow definitions of social entrepreneurial activity. For example, social entrepreneurial activity broadly defined was positively associated with a well-educated labor force and the stock of immigrants, and negatively associated with long-term unemployment and the growth of carbon dioxide emissions. Narrowly defined social entrepreneurial activity, however, was positively associated with taxes on income, profit and capital gains, and the perceived standard of living in a country, while negatively associated with the growth of carbon dioxide emissions. The cases of Colombia and Mexico added detail on how these factors manifest themselves through the characteristics of the entrepreneur, business, and ecosystem. In addition to making practical and theoretical contributions to the field of social entrepreneurship by identifying and validating the socioeconomic factors that correlate with the social entrepreneurial activity in countries, the study may help governments manage social entrepreneurship more efficiently and effectively, improving the rate of return on the resources invested in this activity