Social Enterprises: The Effect of the Institutional Framework on the Prevalence of Social Enterprises, at Country Level

This research investigates the effect of the institutional context on the prevalence of Social Entrepreneurial Activity (SEA) at macro level. By analysing data from the Global Entrepreneurship Monitor report of 2015, this paper takes a cross-national approach in investigating this relationship. Using the reasoning and methodology of multiple scholars that have investigated this relationship in the past this research focuses on formal institutions via government spending and the more general public and private institution scores (of the Global Competitiveness Index 2014-2015). The analysis shows that governmental spending has a positive relationship with the prevalence of SEA. In contrast, the quality of public and private institutions seem to have a negative significant relationship with this SEA measure. In general, the results seem to indicate that government spending is favouring SEA. While better functioning public institutions - in terms of less corruption, more trust from inhabitants and better property rights - do not seem to stimulate individuals to take part in SEA. These findings, therefore, seem to be a mix of the institutional void and support theory when it comes to SEA.