Researchers and practitioners have devoted considerable attention to firms'' policies regarding discretionary disclosures. Prior studies argue that firms increase demand for their debt and equity issues and, thus, lower their cost of capital, by providing more informative disclosures. However, empirical research has generally not been able to document significant benefits from increased disclosure.This paper proposes an alternative explanation – firms disclose because it is the socially responsible thing to do. We argue that companies have incentives to engage in stakeholder management (...) by undertaking socially responsible activities and that providing extensive and informative disclosures is one such practice.We examine the relationship between firms'' disclosures and measures of social responsibility. We use ratings provided by the Council on Economic Priorities as proxies for the degree of social responsibility adopted by the sample firms. Disclosure rankings provided by the annual Association for Investment Management and Research Corporate Information Committee Reports (AIMR Reports) are used to measure disclosure level.Our results indicate that there is a positive relationship between disclosure level and corporate social responsibility. That is, firms that engage in socially responsive activities provide more informative and/or extensive disclosures than do companies that are less focused on advancing social goals. In addition, we find that socially responsible firms are more likely to provide this increased disclosure through better investor relations practices. These results support our contention that increased disclosure is a form of socially responsible behavior. (shrink)

Social entrepreneurship activity continues to surge tremendously in market and economic systems around the world. Yet, social entrepreneurship theory and understanding lag far behind its practice. For instance, the nature of the entrepreneurial discovery phenomenon, a critical area of inquiry in general entrepreneurship theory, receives no attention in the specific context of social entrepreneurship. To address the gap, we conceptualize social entrepreneurial discovery based on an extension of corporate social responsibility into social entrepreneurship contexts. We develop a model that emphasizes (...) mobilization and timing as underpinnings of social entrepreneurial discovery and offer distinct conceptual aspects and theoretic propositions instrumental to future social entrepreneurship research. (shrink)

This paper advances the conception of social entrepreneurs as caring entrepreneurs. We argue that the care ethics of social entrepreneurs, implying the pursuit of caring goals through caring processes, can be challenged when they engage in the process of scaling up their ventures. We propose that social entrepreneurs can sustain their care ethics as the essential dimension of their venture only if they are able to build a caring enterprise. Organizational care designates the set of organizing principles that facilitate the (...) embedding of care ethics at an organizational level, beyond the imprinting induced by social entrepreneurs’ personal ethics. (shrink)

This study explores social enterprises’ strategies for addressing mission drift. Relying on an inductive comparative case study of two Italian social enterprises, we show how stakeholder engagement combined with social accounting can successfully support a social venture to re-balance its positioning between wealth generation and social value creation. Indeed, stakeholder engagement helps the internal actors of a social enterprise to rationalize and embody pro-social values previously abandoned, while social accounting reinforces this embodiment process by showing the reintroduced social commitment of (...) the social enterprise to external audiences. Conversely, strategies focused only on social accounting and without significant engagement of external stakeholders prove to be unsuccessful in counterbalancing mission drift because they fail to activate the necessary process of internal re-introduction and operationalization of pro-social values and objectives. (shrink)

Philanthropic venture capital (PhVC) is a financing option available for social enterprises that, like traditional venture capital, provides capital and value-added services to portfolio organizations. Differently from venture capital, PhVC has an ethical dimension as it aims at maximizing the social return on the investment. This article examines the deal structuring phase of PhVC investments in terms of instrument used (from equity to grant), valuation, and covenants included in the contractual agreement. By content analyzing a set of semistructured interviews and (...) thereafter surveying the entire population of PhVC funds that are active in Europe and in the United States, findings indicate that the non-distribution constraint holding for non-profit social enterprises is an effective tool to align the interests of both investor and investee. This makes the investor behaving as a steward rather than as a principal. Conversely, while backing non-profit social ventures, philanthropic venture capitalists structure their deal similarly as traditional venture capital, as the absence of the non-distribution constraint makes such investments subject to moral hazard risk both in terms of perks and stealing and social impact focus. (shrink)

ABSTRACT:In a world filled with poverty, environmental degradation, and moral injustice, social enterprises offer a ray of hope. These organizations seek to achieve social missions through business ventures. Yet social missions and business ventures are associated with divergent goals, values, norms, and identities. Attending to them simultaneously creates tensions, competing demands, and ethical dilemmas. Effectively understanding social enterprises therefore depends on insight into the nature and management of these tensions. While existing research recognizes tensions between social missions and business ventures, (...) we lack any systematic analysis. Our paper addresses this issue. We first categorize the types of tensions that arise between social missions and business ventures, emphasizing their prevalence and variety. We then explore how four different organizational theories offer insight into these tensions, and we develop an agenda for future research. We end by arguing that a focus on social-business tensions not only expands insight into social enterprises, but also provides an opportunity for research on social enterprises to inform traditional organizational theories. Taken together, our analysis of tensions in social enterprises integrates and seeks to energize research on this expanding phenomenon. (shrink)

Prior research suggests that participating in corporate social responsibility (CSR) activities can lead to higher future productivity. However, the empirical evidence is still scarce. The purpose of this study is to examine the relationship between CSR and future firm productivity in the U.S. chemical industry. Specifically, this study examines the relationship between CSR in year t and firm productivity in year (t + 1), (t + 2), and (t + 3). We use Data Envelopment Analysis, a non-parametric method, to measure (...) firm productivity. Results from the regression analysis support a significantly positive relationship between CSR and future firm productivity, suggesting that CSR can lead to higher productivity in the chemical industry. The findings add to the validity of the proposition in prior research. (shrink)

As Social Economy financial institutions, credit unions have traditionally been considered less efficient than traditional banking entities. However, like banks and savings banks, they have to be as efficient and competitive as possible to survive in today’s business environment, especially at times of crisis. To date, there have been very few studies on their efficiency and practically none for the crisis period. Moreover, almost all the existing studies assess only financial efficiency, without considering their social function. This study examines the (...) levels of both financial and social efficiency in Spanish credit unions as well as their main determinants during the recent crisis. We apply the two-stage double bootstrap data envelopment analysis methodology based on panel data corresponding to all the credit unions active in Spain between 2008 and 2013. The empirical results indicate that financial and social efficiency achieved an acceptable level, although on average the former was slightly greater than the latter. We also find that both age and merger and acquisition activity were positively influential on the financial efficiency of credit unions but had a significant negative effect on their social efficiency. Moreover, the regional location of such entities and the financial crisis were also crucial determinants of both types of efficiency. Our findings are therefore useful for all the stakeholders of credit unions to know if these entities have been efficient according to a double bottom line accounting in the crisis period and hence to maintain successful social management that is compatible with satisfactory financial efficiency. (shrink)