Profit with purpose? a theory of social enterprise with experimental evidence

Besley, Timothy ORCID: 0000-0002-8923-6372 and Ghatak, Maitreesh ORCID: 0000-0002-0126-0897 (2013) Profit with purpose? a theory of social enterprise with experimental evidence. Economic Organisation and Public Policy Discussion Papers (EOPP 047). Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.

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Abstract

When social benefits cannot be measured, a hybrid organization which selects managers based on motivation can be used to balance profi…ts with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers with this goal in mind. It develops the implications of matching between founders and managers based on their preferences for the mission. The main trade-offs suggested by the theory are tested experimentally and these are used to calibrate a matching outcome. This makes precise the parameter range in which social enterprises based on selection will be observed in a market setting; we show that they achieve gains in proficiency of around 10% over non-pro…fit enterprise.

Item Type:	Monograph (Report)
Official URL:	http://sticerd.lse.ac.uk/
Additional Information:	© 2013 The Authors
Divisions:	STICERD
Subjects:	H Social Sciences > HB Economic Theory
Date Deposited:	23 Jul 2014 14:31
Last Modified:	01 Nov 2024 05:05
Funders:	Suntory and Toyota International Centres for Economics and Related Disciplines
URI:	http://eprints.lse.ac.uk/id/eprint/58181

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