American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Profit with Purpose? A Theory of Social Enterprise
American Economic Journal: Economic Policy
vol. 9,
no. 3, August 2017
(pp. 19–58)
Abstract
When social benefits cannot be measured, an organization that selects managers based on pro-social motivation can be used to balance profits with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers to run firms with flexible missions. We analyze organizational choice between social enterprise, for-profits, and nonprofits. The paper also develops the implications of matching between founders and managers based on their preferences for the mission.Citation
Besley, Timothy, and Maitreesh Ghatak. 2017. "Profit with Purpose? A Theory of Social Enterprise." American Economic Journal: Economic Policy, 9 (3): 19–58. DOI: 10.1257/pol.20150495Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- L21 Business Objectives of the Firm
- L31 Nonprofit Institutions; NGOs; Social Entrepreneurship
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