Determinants of the financial performance of social enterprises in an emerging economy: a quantitative analysis

• Published in: Social enterprise journal Vol. 20; no. 4; pp. 441 - 471
• Main Authors: Fernandes, Eduardo da Silva, Grochau, Ines Hexsel, ten Caten, Carla Schwengber, Horst, Diogo José, Andrade Junior, Pedro Paulo
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 04-07-2024; Emerald Group Publishing Limited
• Subjects: Companies; Donations; Emerging markets; Entrepreneurs; Financial performance; Influence; Organizational effectiveness; Quantitative analysis; Social entrepreneurship; Social impact; Social responsibility; Sustainability; Variables; Brazil; Emerging economies; Financial entrepreneurship; Financial performance; Resource-based view; Quantitative analysis
• ISSN: 1750-8614; 1750-8614; 1750-8533
• DOI: 10.1108/SEJ-04-2023-0043

Purpose
This paper aims to identify the determining factors for the financial performance (FP) of social enterprises in an emerging country, in this case Brazil.
Design/methodology/approach
This paper identifies the determinants of the FP of social enterprises in Brazil using the resource-based view as a theoretical lenses and the quantitative method (n = 601) of logistic regression, analyzing the importance of nine variables related to SEs.
Findings
The findings refer to practical contributions (which show how SEs should focus and allocate their resources to maximize FP) and theoretical contributions linked to entrepreneurship literature (by differentiating the results of this work from the literature on commercial entrepreneurship in terms of resources), social entrepreneurship literature (by presenting the resources that determine their FP), business literature, entrepreneurial finance and entrepreneurship in emerging economies.
Originality/value
This work represents a novelty from a methodological point of view, filling the gap regarding the lack of studies that apply a quantitative methodology to a large sample and analyze several different variables when most studies analyze only one factor related to the performance of an organization. It also fills the gap in entrepreneurship studies that use some theoretical lenses. This work is also a pioneer in analyzing the variables involved, such as market orientation, technologies and impact measurement in social entrepreneurship. As this work uses data from a secondary sample, there is the limitation of not choosing the analyzed variables. Even though there were many variables in the sample, it was impossible to consider some variables, referring to various aspects of resources and performance. For this same reason, the social performance of SEs, which is of fundamental importance within the objectives of any organization of this type, was not analyzed and may be a suggestion for future work.