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Are Social Enterprises Efficient? A Theoretical Approach

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  • Tobias Beckmann

Abstract

Social enterprises are increasingly being used to distribute income to disadvantaged groups. However, a lack of consensus of what a social enterprise is has prevented researchers from assessing their relative allocative efficiency. I address this gap by extending the standard microeconomic model of a profit‐maximising firm to consider social enterprises as a Social Corporation (SC). I then analyse four types of SC, showing that three can be as allocatively efficient as a for‐profit firm in equilibrium, despite inputs not necessarily being paid their marginal benefit.

Suggested Citation

  • Tobias Beckmann, 2018. "Are Social Enterprises Efficient? A Theoretical Approach," Economic Papers, The Economic Society of Australia, vol. 37(4), pages 374-389, December.
    • Handle: RePEc:bla:econpa:v:37:y:2018:i:4:p:374-389
    DOI: 10.1111/1759-3441.12232
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    References listed on IDEAS

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