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The regional employment effects of new social firm entry

Author

Listed:
  • Habib Kachlami

    (Mid Sweden University)

  • Per Davidsson

    (Queensland University of Technology
    Jönköping International Business School)

  • Martin Obschonka

    (Queensland University of Technology)

  • Darush Yazdanfar

    (Mid Sweden University)

  • Anders Lundström

    (The Institute of Innovative Entrepreneurship)

Abstract

As a contribution to research and theorizing on the economic role of new firm formation, we undertake the first ever investigation of regional employment effects of the entry of new social firms. Our study is guided by an established model of the employment effects of new firm entry over time and provides a direct comparison to the employment effects of commercial entrants. Our results show that the net employment effect of new social firms follows a wave pattern over the study’s eight-year horizon, apparently produced by the same combination of direct and indirect effects previously theorized for new commercial entrants. The results also indicate that net employment effect per social firm entrant is larger than for commercial firms. The study provides a first empirical assessment of employment creation effects of new social firms and contributes to a more nuanced theoretical understanding of employment effects across types of entrants. By specifying the economic contribution of social firms our study can open up a new track in social entrepreneurship research and provide important input to employment policy.

Suggested Citation

  • Habib Kachlami & Per Davidsson & Martin Obschonka & Darush Yazdanfar & Anders Lundström, 2021. "The regional employment effects of new social firm entry," Small Business Economics, Springer, vol. 57(3), pages 1221-1241, October.
    • Handle: RePEc:kap:sbusec:v:57:y:2021:i:3:d:10.1007_s11187-020-00345-9
    DOI: 10.1007/s11187-020-00345-9
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