IDEAS home Printed from https://ideas.repec.org/a/bap/journl/160104.html
   My bibliography  Save this article

Key Factors for Success of Social Enterprises in Italy: Analysis of Financial and Operating Performance

Author

Listed:
  • Barbara Sveva Magnanelli

    (Faculty of Economics, Universitas Mercatorum, Via Appia Pignatelli 62, 00178, Rome, ITALY)

  • Elisa Raoli

    (Faculty of Economics, Universitas Mercatorum, Via Appia Pignatelli 62, 00178, Rome, ITALY)

  • Agnese Sacchi

    (Faculty of Economics, Universitas Mercatorum, Via Appia Pignatelli 62, 00178, Rome, ITALY)

Abstract

Assessing social performance is one of the greatest challenges for practitioners and researchers in social entrepreneurship. Even though social enterprises (SEs) have the main goal of achieving social purposes, they should also be able to economically and financially survive to meet their aim and accomplish their tasks. To this purpose, we investigate if the key factors leading to the financial and operating performance are the same as those of for-profit firms, by using Italian data at a firm level during the period 2002-2013. We find that the standard financial and operating factors characterising for-profit firms¡¯ performance play a crucial role for SEs¡¯ results as well. Moreover, territorial and socio-economic variables seem to have a positive impact on financial performance. From a policy perspective, this may imply that further programs (e.g. safety-oriented and those promoting facilities in the territory) should be locally adopted to support the SEs¡¯ activity and development.

Suggested Citation

  • Barbara Sveva Magnanelli & Elisa Raoli & Agnese Sacchi, 2016. "Key Factors for Success of Social Enterprises in Italy: Analysis of Financial and Operating Performance," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 43-60, February.
    • Handle: RePEc:bap:journl:160104
    Note: Acknowledgments: The authors would like to thank Belinda Luke, (Queensland University of Technology, Brisbane, Australia), anonymous referees and the Editor for useful comments on a previous version of the paper. Special thanks are due to LUISS (¡°Guido Carli¡± University of Rome) Library for providing the economic, budgetary and financial data of social enterprises. The usual disclaimer applies.
    as

    Download full text from publisher

    File URL: http://www.bapress.ca/ref/ref-article/1923-7529-2016-01-43-18.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    2. John Thompson & Bob Doherty, 2006. "The diverse world of social enterprise: A collection of social enterprise stories," International Journal of Social Economics, Emerald Group Publishing, vol. 33(5/6), pages 361-375, May.
    3. John Goddard & Manouche Tavakoli & John Wilson, 2005. "Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model," Applied Financial Economics, Taylor & Francis Journals, vol. 15(18), pages 1269-1282.
    4. Peri Giovanni, 2004. "Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-36, September.
    5. Alnoor Ebrahim & V. Kasturi Rangan, 2010. "The Limits of Nonprofit Impact: A Contingency Framework For Measuring Social Performance," Harvard Business School Working Papers 10-099, Harvard Business School.
    6. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    7. repec:bla:jfinan:v:53:y:1998:i:3:p:1081-1110 is not listed on IDEAS
    8. James S. Wallace, 2003. "Value Maximization And Stakeholder Theory: Compatible Or Not?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 15(3), pages 120-127, March.
    9. James Austin & Howard Stevenson & Jane Wei–Skillern, 2006. "Social and Commercial Entrepreneurship: Same, Different, or Both?," Entrepreneurship Theory and Practice, , vol. 30(1), pages 1-22, January.
    10. Roger G. Ibbotson & Peng Chen, 2003. "Long-Run Stock Returns: Participating in the Real Economy," Yale School of Management Working Papers ysm354, Yale School of Management.
    11. Harrison, Jeffrey S. & Wicks, Andrew C., 2013. "Stakeholder Theory, Value, and Firm Performance," Business Ethics Quarterly, Cambridge University Press, vol. 23(1), pages 97-124, January.
    12. Mark Hayllar & Roger Wettenhall, 2013. "As Public Goes Private, Social Emerges: The Rise of Social Enterprise," Public Organization Review, Springer, vol. 13(2), pages 207-217, June.
    13. Smith, Wendy K. & Gonin, Michael & Besharov, Marya L., 2013. "Managing Social-Business Tensions: A Review and Research Agenda for Social Enterprise," Business Ethics Quarterly, Cambridge University Press, vol. 23(3), pages 407-442, July.
    14. Bhagat, Sanjai & Bolton, Brian, 2008. "Corporate governance and firm performance," Journal of Corporate Finance, Elsevier, vol. 14(3), pages 257-273, June.
    15. Mair, Johanna & Martí, Ignasi, 2006. "Social entrepreneurship research: A source of explanation, prediction, and delight," Journal of World Business, Elsevier, vol. 41(1), pages 36-44, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesco Campanella & Luana Serino, 2019. "Firms Use of Financial Leverage: Evidence from Italy," Review of Economics & Finance, Better Advances Press, Canada, vol. 17, pages 65-78, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Amoyea Atogenzoya & Anna Comacchio, 2019. "Nature and Management of Social-business Tensions: A Study of Micro and Small Social Enterprises in Developing Countries," Proceedings of Business and Management Conferences 8612069, International Institute of Social and Economic Sciences.
    2. Janni Grouleff Nielsen & Rainer Lueg & Dennis van Liempd, 2019. "Managing Multiple Logics: The Role of Performance Measurement Systems in Social Enterprises," Sustainability, MDPI, vol. 11(8), pages 1-23, April.
    3. Philip T. Roundy & Michaël Bonnal, 2017. "The Singularity of Social Entrepreneurship: Untangling its Uniqueness and Market Function," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 26(2), pages 137-162, September.
    4. Adélie Ranville & Marcos Barros, 2022. "Towards Normative Theories of Social Entrepreneurship. A Review of the Top Publications of the Field," Journal of Business Ethics, Springer, vol. 180(2), pages 407-438, October.
    5. Bing Ran & Scott Weller, 2021. "An Exit Strategy for the Definitional Elusiveness: A Three-Dimensional Framework for Social Entrepreneurship," Sustainability, MDPI, vol. 13(2), pages 1-15, January.
    6. Reeti Kulshrestha & Arunaditya Sahay & Subhanjan Sengupta, 2022. "Constituents and Drivers of Mission Engagement for Social Enterprise Sustainability: A Systematic Review," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 31(1), pages 90-120, March.
    7. Barbara Bradač Hojnik & Katja Crnogaj, 2020. "Social Impact, Innovations, and Market Activity of Social Enterprises: Comparison of European Countries," Sustainability, MDPI, vol. 12(5), pages 1-15, March.
    8. Choi, Nia & Majumdar, Satyajit, 2014. "Social entrepreneurship as an essentially contested concept: Opening a new avenue for systematic future research," Journal of Business Venturing, Elsevier, vol. 29(3), pages 363-376.
    9. Sophie Bacq & Chantal Hartog & Brigitte Hoogendoorn, 2016. "Beyond the Moral Portrayal of Social Entrepreneurs: An Empirical Approach to Who They Are and What Drives Them," Journal of Business Ethics, Springer, vol. 133(4), pages 703-718, February.
    10. Yeamduan Narangajavana & Tomas Gonzalez-Cruz & Fernando J. Garrigos-Simon & Sonia Cruz-Ros, 2016. "Measuring social entrepreneurship and social value with leakage. Definition, analysis and policies for the hospitality industry," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 911-934, September.
    11. Bhattarai, Charan Raj & Kwong, Caleb C.Y. & Tasavori, Misagh, 2019. "Market orientation, market disruptiveness capability and social enterprise performance: An empirical study from the United Kingdom," Journal of Business Research, Elsevier, vol. 96(C), pages 47-60.
    12. Lee Siew Tee & Ismail Nizam, 2020. "The Influence of Corporate Governance on Financial Performance Mediated by Gender Diversity," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 10(1), pages 61-79, January.
    13. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, December.
    14. Theodor Vladasel & Simon C. Parker & Randolph Sloof & Mirjam van Praag, 2024. "Revenue drift, incentives, and effort allocation in social enterprises," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 33(3), pages 630-651, August.
    15. Pradeep Kumar Hota, 2023. "Tracing the Intellectual Evolution of Social Entrepreneurship Research: Past Advances, Current Trends, and Future Directions," Journal of Business Ethics, Springer, vol. 182(3), pages 637-659, January.
    16. Isabelle Solal & Kaisa Snellman, 2019. "Women Don’t Mean Business? Gender Penalty in Board Composition," Organization Science, INFORMS, vol. 30(6), pages 1270-1288, November.
    17. Leitão, Maria Eugénia & Amaral, Miguel & Carvalho, Ana, 2024. "Reconceptualizing socio-tech entrepreneurship: A systematic literature review and research agenda," Technovation, Elsevier, vol. 134(C).
    18. Jonghun Sun & Young Woo Sohn, 2021. "The Influence of Dual Missions on Employees’ Meaning of Work and Turnover Intention in Social Enterprises," Sustainability, MDPI, vol. 13(14), pages 1-14, July.
    19. Sayem Hossain & M. Abu Saleh & Judy Drennan, 0. "A critical appraisal of the social entrepreneurship paradigm in an international setting: a proposed conceptual framework," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-22.
    20. João J. Ferreira & Cristina I. Fernandes & Marta Peres-Ortiz & Helena Alves, 2017. "Conceptualizing social entrepreneurship: perspectives from the literature," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 14(1), pages 73-93, March.

    More about this item

    Keywords

    Performance; Social enterprises; Territory-oriented mission; Italy;
    All these keywords.

    JEL classification:

    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bap:journl:160104. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Carlson (email available below). General contact details of provider: http://www.bapress.ca .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.