Determinants of social enterprise performance: The role of passion, competence, and organizational legitimacy

Abstract

Social enterprises have been widely recognized as tools to solve societal problems. As the soul of social enterprises, social entrepreneurs help social enterprises overcome resource constraints and achieve survival and development. However, existing studies have focused limited attention on the effects of social entrepreneur characteristics on social enterprise performance. Drawing on the institutional logics perspective, this paper constructs a theoretical model of social entrepreneurial passion and entrepreneurial competence affecting social enterprise performance through organizational legitimacy and examines the moderating effect of regulatory uncertainty. Data were collected from 198 social enterprises in China. The results indicate that organizational legitimacy mediates the relationships between social entrepreneurial passion, entrepreneurial competence, and social enterprise performance. Regulatory uncertainty positively moderates the relationship between organizational legitimacy and social enterprise economic performance. The findings of this study contribute to research on social enterprise performance and organizational legitimacy. This paper also offers practical suggestions that social entrepreneurs should exert their passion and competence, obtain organizational legitimacy, and analyze the institutional environments to promote the development of the enterprise.