Social Entrepreneurship and Income Distribution

Social Entrepreneurship and Income Distribution

María-Soledad Castaño-Martínez (University of Castilla-La Mancha, Spain), María-Teresa Méndez-Picazo (University Complutense of Madrid, Spain) and Miguel-Ángel Galindo-Martín (University of Castilla-La Mancha, Spain)
DOI: 10.4018/978-1-5225-0097-1.ch003
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Social entrepreneurship is one of the most important forms of entrepreneurship, especially in the context of the current economic crisis. The aim of this chapter is to analyze the influence of a number of factors, such as income distribution, institutions, and human capital on social entrepreneurship. In addition, it analyses the impact of these factors and social entrepreneurship on economic performance. This chapter includes an empirical analysis, with Partial Least Square (PLS) estimation for 29 countries using data from 2012.
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Socioeconomic Factors, Entrepreneurs And Social Entrepreneurs: Effects On Economic Performance

One of the main difficulties when discussing entrepreneurship is the lack of a single definition. Wennekers and Thurik (1999), basing themselves on the ideas presented by Hébert and Link (1989), Bull and Willard (1993) and Lumpkin and Dess (1996), propose the following definition:

Entrepreneurship is the manifest ability and willingness of individuals, on their own, in teams, within and outside existing organizations, to:

  • Perceive and create new economic opportunities (new products, new production methods, new organizational schemes and new product-market combinations) and to

  • Introduce their ideas in the market, in the face of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions.

Social entrepreneurship may be defined as a form of entrepreneurship in which, through the use of business tools, entrepreneurs create and develop a profitable, sustainable enterprise which contributes to social improvement and reinvests profits in the business (Fowler, 2000; Austin, Stevenson y Wei-Skillern, 2006; Arend, 2013). The creation of social enterprises is not new, nor is the figure of the social entrepreneur. Social enterprises are key actors due to their capacity to create jobs and the fact that they carry out an activity which cannot be conducted by the public sector or for-profit businesses. Consequently, a large number of authors consider social enterprises to be a mixture of non-profit organization and business (Dees, 1998; Dees, Emerson, & Economy, 2001; Young, 2003; Young & Salamon, 2002).

Key Terms in this Chapter

Distribution of Income: The way in which income is divided among the population of a country.

Social Entrepreneurship: A business venture which aims to provide goods or services which meet social needs using business tools to make the enterprise sustainable.

Rule of Law: Principle by which the citizens of a country are subject to the law, in such a way that the law has authority and influence in society.

Economic Growth: The increase in the production of goods and services in a country during a period of time.

Institutions: The structures and mechanisms present in a society which regulate the conduct of individuals, promoting or discouraging certain behaviours. They may be formal (usually written, such as laws, norms, contracts) or informal (unwritten, such as customs, taboos, traditions).

Entrepreneurship: A business venture launched by one or various individuals who identify market opportunities and are willing to assume economic risks so as to achieve profitability and consolidation over time.

Human Capital: A productive resource which brings together the training, abilities and skills of individuals who take part in production processes and which are related to work productivity. It depends on factors such as education and experience.

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