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Social Capital as a Driver of Social Entrepreneurship
Article in Journal of Social Entrepreneurship · June 2021

DOI: 10.1080/19420676.2021.1951819
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Journal of Social Entrepreneurship
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Journal: Journal of Social Entrepreneurship
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Manuscript ID RJSE-2020-0187.R1
Manuscript Type: Original Article
Keywords: social entrepreneurship, social capital, enterprises, social entrepreneur
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Page 3 of 37 Journal of Social Entrepreneurship Commented [A1]: This is a little hard to read/follow.
Perhaps removing the content in the brackets would help
here – as this content is better placed in the paper itself.
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1
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6 Social entrepreneurship is a field widely explored from multiple perspectives and within
7 multiple academic disciplines. In parallel, practitioners have applied social
8
9 entrepreneurship principles to multiple sectors and on multiple levels. This research
10 investigates how social capital applied to social entrepreneurship can contribute as a
11
12 driver of social enterprise.
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14 A systematic literature review was conducted based on searches of major academic
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16 databases (Web of Science, Ebsco and Periódicos Capes), winnowing an initial list of
17 3,106 papers down to 472 articles that underwent content analysis. The results of this
18
19 analysis were summarised and used to develop a theoretical proposal and propositions
20 relating social entrepreneurship to social capital and highlighting the social entrepreneur’s
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22 social connections with the collective actors and institutions that together constitute social
23 entrepreneurship.
24
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26 The discussion presented suggests that the interface between social entrepreneurship and
27 social capital is a latent field for research and the paper ends by presenting a model to
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29 consolidate research efforts, identifying three key themes that recur in the literature:
30 Creation of social capital by the social entrepreneur, social capital and its relationship
31
32 with the institutions, and Social capital as a former of groups. In these terms, a future
33 agenda is presented for debating these issues.
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39 Keywords: social entrepreneurship; social entrepreneur; social capital; enterprises
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42
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45 Introduction
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47 Social entrepreneurship has been attracting widespread interest over the last 2 decades.
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50 Studies of social entrepreneurship have become a phenomenon and their appeal has
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52 grown strongly among socially conscious groups. People have become more sceptical
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54 about the ability of governments and businesses to solve pressing social problems such
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57
as poverty, social exclusion and the environment (French et al. 2020; Wilson 2008).
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59 Much of the enthusiasm expressed in this topic stems from the challenging empirical
60
1
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3 context offered by social entrepreneurship that combines both for-profit and non-profit
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6 organisational activity (Dacin, Dacin, and Tracey 2011).
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8 Social entrepreneurship has become a rich academic field for discovery of
9
10 models inspired by value creation. Across the world, the status quo and conventional
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12
thinking about what is feasible have been challenged (Germak and Robinson 2014). In
13
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15 addressing social problems and enriching communities and societies, social
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17 entrepreneurship has attracted considerable interest in the literature (Zahra et al. 2009).
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19 However, although social entrepreneurship is a mature research field (Gupta et al.
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22 2020), its theoretical foundations have not been adequately explored and, consequently,
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24 there is a lack of consensus on the definition of the term ‘social entrepreneurship’
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26 (Santos 2012) and a lack of clear boundaries (Newbert and Hill 2014). For example, Commented [A2]: This argument and references feel a
27 little outdated, although I know it is an argument that’s often
28 used to position research. Upon reading the rest of the paper
29 social entrepreneurship can be considered on several different levels, such as the I’m not sure it’s important that you mention this. Does your
30 paper contribute towards a consensus definition of social
entrepreneurship? Does the fact that social capital is part of
31 individual, firm, or even societal. This study aims to understand the process of social entrepreneurship change the definition of the concept?
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33 Commented [A3]: These sound like clear boundaries to
formation of social enterprises from a triad of perspectives: the individual (social me?
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35 Commented [A4]: A study cannot understand, but it could
entrepreneur), who articulates and connects people to a common purpose; the active
36 contribute to understanding of something.
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38 group (participants, donors, volunteers, collaborators, etc.) that constitutes the
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40 collectivity around the cause; and institutions (entities, support providers, NGOs,
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42 cooperatives, etc.), which are part of the operating environment and support
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44 Commented [A5]: What does this mean?
45 normalisation and sustainability of the enterprise. Clearly, the heterogeneity of the
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47 phenomena involved makes it difficult to build a landscape that includes the several
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49 levels of analysis and incorporates a future agenda identifying research avenues.
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52
Regarding this perspective on social entrepreneurship and the different levels of
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54 interactions involved, it can be assumed that social entrepreneurs leverage relationships
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56 with active groups or institutions for creation or mobilisation of social capital resources,
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to complement economic and social objectives. According to Putnam (2002), social
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3 capital is a driver for establishing relationships of trust and collaboration, leading to an
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6 environment that favours collective and joint development. Broadly speaking, the
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8 concept of social capital encompasses the roles played by individuals, their social
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10 networks, and the institutions present in a particular socioeconomic field. Thus, social
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capital refers to circumstances in which individuals can use membership in groups and
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15 networks to secure benefits. One can acquire social capital through purposeful actions
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17 and can transform social capital into conventional economic gains. The ability to do so,
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19 however, depends on the nature of social obligations and connections (Sobel 2002).
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22 Social capital refers to aspects of social organisation, such as networks, norms
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24 and bonds of trust, which facilitate coordination and cooperation for mutual benefits.
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26 Expansion of the social and human capital of a community is associated with the
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29 presence of social leaderships, who mobilise social actors and maximise social
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31 development actions (Putnam 2002). Commented [A6]: Would be useful to have this further up
32 perhaps, before social capital is mentioned.
33 At the same time, the concept of social entrepreneurship is founded on the
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35
observation that rather than entrepreneurs being limited to a small set of people known
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38 directly, they can take advantage of social networks. This statement sheds light on the Commented [A7]: Would need some evidence to be
39 convinced of this point. Is this saying that entrepreneurs that
40 reasons why social entrepreneurship researchers have responded so favourably to the aren’t ‘social’ don’t take advantage of social networks? I
thought what marks these entrepreneurs as ‘social’ is the aim
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42 of what they are pursuing.
principles of social capital. Following this argument, it is important to state that, for the
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45 purposes of this article, social capital is understood as the resources that are available to
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47 people through their social connections. Thus, application of the principles of social
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49 entrepreneurship to social capital provides grounds for the assumption that
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51 Commented [A8]: Social entrepreneurs or just
52
entrepreneurs can reap substantial transformational results by skilfully using their social entrepreneurs?
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54 ties, increasing their chances of success (Rakhmani and Bhinekawati 2020).
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56 Given this perspective, this article aims to present an overview of studies dealing
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58 Commented [A9]: This is the second aim to be stated,
with social capital and social entrepreneurship. The main motivation for conducting this
59 alongside the aim to contribute to the understanding of the
60 social enterprise formation process. They might well be
interlinked but it would be more helpful to set these aims in
the same place and make sure they talk to one another, and
with your research question.
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3 research is to attempt to answer the question, ‘How does social capital create conditions
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6 for social entrepreneurship?’ Studies of this subject are necessary since they can
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8 enhance development of social innovations. Commented [A10]: Is there evidence of this claim? And
9 is it the social innovations themselves that are being
10 In order to reveal insights to help meet this objective, an approach to social enhanced or the enhancement of the businesses delivering
the social innovation?
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12 Commented [A11]: Is this referring to the aim? The
entrepreneurship and social capital was developed based on several different
13 research question?
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15 propositions and a theoretical framework. There are still few studies that explore this
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17 theme and reveal the true nature and applicability of the entrepreneurship paradigm to
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19 the social sphere, i.e., the connection between entrepreneurship and social capital (Lang
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22 and Fink 2019). Moreover, the study focuses on an element of the understanding of the
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24 phenomenon of social entrepreneurship that is still little explored, related to the process
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26 of formation of a social enterprise (Molecke and Pinksen 2017). The objectives of social Commented [A12]: This is your first aim stated again?
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28 Commented [A13]: Mentioned social enterprises a few
29 enterprises are deeply rooted in the values of their founders, balancing the motives for times by now but there’s no distinction as to what they are
30 and if they are inextricably linked with social entrepreneurs
31 creating social wealth with the need for profits and economic efficiency. Social or not. For example, could a social entrepreneur run a private
company and not a social enterprise?
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33 entrepreneurs often work in domains with little governance and supervision (Zahra et al.
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2009). Formation of such an enterprise requires elements that include an entrepreneur's
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38 capacity to use social interaction to establish local social networks that will support their
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40 communities (Fligstein 1997; Robins 2006).
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42 In order to fill these gaps, a systematic review was conducted of literature
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45 indexed on scientific databases. A systematic literature review provides a means to
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47 recognise the latent structure underlying a field of research and identify the main
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49 research themes that academics are working with. A total of 3,106 papers were
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identified . After selecting relevant studies, a total of 472 articles were analysed. A
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54 content analysis procedure was used to map the main concepts and theoretical
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56 approaches and present the main characteristics of work on social entrepreneurship
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employing the concept of social capital.
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3 The study starts by addressing the theoretical assumptions underlying the
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6 concepts of social entrepreneurship and social capital. Then the methodological aspects
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8 are described. Later, it is presented a discussion about the influence of social capital on Commented [A14]: Wording - A discussion is presented?
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10 the development of a social enterprise, making connections between three perspectives:
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individual, group and institutions. Three propositions and a framework are presented to
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15 consolidate this topic. The paper ends with a discussion of the limitations of this
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17 research and suggestions for a new research agenda.
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21 Theoretical background
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24 Although entrepreneurship may be regarded as a fairly young scientific field, it has a
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26 long history as an intellectual issue and some pioneering contributions were published Commented [A15]: What is an intellectual issue? Could
27 you explain?
28 as far back as the 18th century (Landström 2020). In the last 2 decades, social
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entrepreneurship has evolved as a research domain of great significance for firms and
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33 researchers (Kannampuzha and Hockerts 2019). Although social entrepreneurship has
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35 been gaining in popularity, scholars are engaged in a series of debates involving
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37 conceptual clarity and the boundaries of the field and the struggle to create a set of
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40 relevant and meaningful research questions.
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Social Entrepreneurship
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46 According to Rakhmani and Bhinekawati (2020) the notion of ‘social entrepreneurship’
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has become increasingly popular over the past 2 decades. In their study of social
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51 entrepreneurship, Austin, Stevenson and Wei-Skillern (2006) explain that study of the
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53 concept of entrepreneurship can be divided into three phases. The first began with
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Schumpeter's seminal article (1934) that examined entrepreneurship as a key process
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58 through which the economy advances as a whole. In a second phase, research began to
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60 focus on the figure of the entrepreneur from psychological and sociological
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3 perspectives. Finally, a third phase focused on the business management process,
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6 including research into how to promote innovation within established firms, start-ups,
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8 venture capital, organisational life cycles, and predictors of business success. Despite its
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10 interdisciplinary nature, social entrepreneurship should be understood as a complex
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social movement that is still in progress. For these reasons, the new field of social
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15 entrepreneurship is replete with opportunities for study and research (Douglas and
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17 Prentice 2019).
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19 Social entrepreneurship can be defined as employing new types of resources in
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22 different ways while combining the inventiveness of traditional entrepreneurship with a
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24 mission to change society (Germak and Robinson 2014; Zivkovic 2018). In this sense,
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26 entrepreneurship has become a watchword and politicians and policymakers see
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28 Commented [A16]: Entrepreneurship or social
29 entrepreneurship as a solution to many social problems (Landström 2020). entrepreneurship?
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31 Consequently, social entrepreneurs take on the role of change makers (Stevens, Moray,
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33 and Bruneel 2015) because they identify trends and seek innovative solutions to social
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and environmental problems, either by seeing a problem that has not yet been
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38 recognised by society and/or by seeing it through a different perspective (Shaw and
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40 Carter 2007). In addition to new non-profit ventures, social entrepreneurship can also be
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42 pursued by business ventures with social purposes, such as for-profit community
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45 development banks and hybrid organisations that combine non-profit elements with for-
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47 profit elements. This perspective helps to broaden the scope of socially oriented
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49 entrepreneurial activities (Dees 1998).
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Social entrepreneurship is rooted in the strong tradition of theory and research
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54 on entrepreneurship and the social entrepreneur can be considered as a type of
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56 entrepreneur. Dees (1998) draws a parallel between commercial and social
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entrepreneurs, while pointing to the differentiation in their social mission. The core
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3 characteristics of a social entrepreneur include: (i) the recognition and ‘relentless’
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6 pursuit of new opportunities to promote the mission of creating value; (ii) continuous
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8 involvement in innovation and modification; and (iii) daring actions taken without
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10 accepting resource limitations. There is a general understanding in these definitions that
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social entrepreneurs focus on the social mission or the social value creation (Austin,
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15 Stevenson, and Wei-Skillern 2006; Peredo and McLean 2006).
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17 On the one hand, the social mission is central and explicit for social
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19 entrepreneurs and impact is judged relative to the mission and not to wealth. For social
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21 Commented [A17]: Are social entrepreneurs not
22 entrepreneurs, wealth is only a means to a certain end. For commercial entrepreneurs, commercial too? Don’t think commercial entrepreneur has
23 been defined previously, just ‘entrepreneur’
24 the generation of wealth is a way of measuring value creation. This is because
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26 commercial entrepreneurs are subject to market discipline, which most often determines
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29 if they are generating value. If they do not switch their resources to be used in a more
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31 economically productive way, they will tend to be ejected from the market (Dees 1998).
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33 On the other hand, it is relevant to consider that social entrepreneurs are not the
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opposite of wealth creation. For example, Douglas and Prentice (2019) researched the
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38 roles of prosocial attitude, profit and innovation as motivators of social
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40 entrepreneurship, constructing a three-motive model which they argue is also applicable
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42 to commercial entrepreneurs aiming to practise corporate social responsibility while still
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45 pursuing profits. Thus, social entrepreneurship does not exclude profit-making and
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47 neither do social entrepreneurs necessarily disregard wealth creation, rather, they
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49 reconcile these different motivations and objectives (Stevens, Moray, and Bruneel
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51 Commented [A18]: Good, kind of answers my previous
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2015). comment but would still be handy to define commercial
53 entrepreneurs more explicitly.
54 For Van Ryzin et al. (2009), social entrepreneurs play the role of agents of
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56 change in the social sector by adopting a mission to create and sustain social value (not
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just private value, but not excluding private value either); recognizing and relentlessly
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3 pursuing new opportunities to serve that mission; engaging in a process of continuous
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6 innovation, adaptation and learning; acting boldly without being limited by resources
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8 currently in hand, and exhibiting heightened accountability to the constituencies served
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10 and for the outcomes created. Their work enables the process of change to be
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accelerated and inspires other actors to engage in a common cause. Social entrepreneurs
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15 establish new organisations, develop and implement innovative programs and organise
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17 or distribute new services (Sharir and Lerner 2006).
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19 Social entrepreneurs can create new ways to influence existing economic
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22 organisations and create change through new technologies. This may mean disrupting
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24 business structures, tools and models from their normal way of operating by replacing
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26 an existing method with a cheaper tool or innovation, thus creating a new technology to
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29 solve an ongoing problem or re-orienting an old idea into a new context (Martin and
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31 Osberg 2007).
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33 Presenting similar ideas, Peredo and McLean (2006) argue that social
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entrepreneurs can balance the interests of multiple interested parties and at the same
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38 time maintain their sense of mission in the face of moral complexity. Moreover, they
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40 excel at recognizing and seizing opportunities to deliver the social value they propose to
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42 provide. Wallace (1999) sees social purpose firms as a means of harvesting the energies
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45 of all three sectors to combat economic and social problems entrenched in urban
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47 communities. However, social entrepreneurship can also be carried out by hybrid
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49 organisations that simultaneously pursue social and economic goals (Bacq and Alt
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2018; Mair and Marti 2006). In this case, social motivations are combined with a profit
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54 motive, resulting in hybrid organisations that conciliate commercial and social
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56 enterprises (Battilana and Lee 2014; Haigh et al. 2015).
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3 For Hespanha (2009), in highly unfavourable environments, creativity and
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6 ability to improvise can be of greater utility to entrepreneurship than risk-taking, since
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8 ensuring survival of the venture is often a massive challenge. According to Cruz Filho
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10 (2012), these organisations work under a wide variety of legal structures and represent
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new responses to changes brought about by economic crises, to the difficulties of the
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15 State and to the social and economic needs and aspirations of their communities.
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17 Sabourin (2008) states that economic activities are not motivated solely by individual or
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19 corporate material interest, many of them also include concern for satisfaction of others'
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21 Commented [A19]: Might need to explain this further and
22 needs or maintenance of the social bond. In this sense, social capital can be defined as a be careful of confusion with things like social impact bonds
23 which are financial instruments.
24 set of characteristics such as trust, norms and systems, which contribute to increasing
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26 the efficiency of society and facilitate coordinated actions.
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30 Social Capital
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33 Social capital is usually associated with information, trust and norms of reciprocity
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35 inherent in social networks that pervade individuals (Bourdieu 1986) and communities
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(Bourdieu 1986; Putnam 2002; Woolcock 1998). On the one hand, for Putnam (2002),
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40 social capital is related to values of society, solidarity and community. On the other
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42 hand, for Bourdieu (1986), social capital is based on forms of power and domination. It
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44 is in line with Coleman’s (1990) view on the definition of social capital, in that social Commented [A20]: What is?
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47 capital is not a single concept, but a variety of different structural concepts that facilitate
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49 the actions of actors within a social structure. Along similar lines, Bourdieu and
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51 Wacquant (1992) define social capital as the sum of real or virtual resources that revert
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to an individual or group because of a durable network of more or less institutional
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56 relationships of mutual knowledge and recognition.
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58 Social capital can be understood as the goodwill generated by the fabric of social
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relations that can be mobilised to facilitate action (Adler and Kwon 2002). Thus, social
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3 capital is a social network resource that benefits a local actor by connecting them to
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6 other actors. Social capital would be a resource located in the external links of a central
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8 actor, giving cohesion to the collectivity and facilitating the search for common
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10 objectives (Adler and Kwon 2002). Also seen as the relationship with friends and
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colleagues through which it is possible to use financial and human capital (Bourdieu
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15 1986), social capital enhances people’s ability to work together in groups and
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17 organisations with a common purpose, thus fostering cooperation between group
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19 members. It is also related to social networks and establishing norms and rules that
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22 generate trust, thus facilitating coordination and collaboration (Putnam 2002).
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24 Social capital refers to the social connections that people use to obtain resources
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26 that they would otherwise acquire by spending their human or financial capital (Kim
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29 and Aldrich 2005). In broad terms, study of the concept of social capital includes the
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31 study of how social relations can positively influence the actions of particular
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33 individuals, groups or organisations. This phenomenon has been seen from many
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35 Commented [A21]: Would be useful to list some
perspectives, generating research in fields ranging from economics to education.
36 references of these ‘many perspectives’. I understand the
37 reference that follows this (Marconatto et al) might talk to
38 Marconatto, Ladeira and Wegner (2019) state that the term social capital is used this but when stating ‘many’ I’d expect a list.
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40 differently, depending on the field of study. They explain that in the literature on
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42 political science, sociology and anthropology, social capital generally refers to a set of
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45 norms, networks and organisations through which people gain access to power and
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47 resources that are instrumental in enabling decision-making and formulating policies.
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49 Social capital is also used in different ways and at different levels in the management
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52
literature, in relation to internal structures within the same firm, inter-organisational
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54 relationships and career development, for example.
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56 Within management, the concept of social capital is also used to describe how
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58
economic actors draw resources from their social networks. Used in this sense, social
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60
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3 capital constitutes the value an individual can derive from social relations. In the
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6 context of entrepreneurs, the concept of social capital refers to the various relationships
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8 between entrepreneurs and their families, friends, associates and communities
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10 (Davidsson and Honig 2003). For example, in their widely cited review of the field of
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12
social entrepreneurship, Mair and Martí (2006) suggest that social capital could be used
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15 for social entrepreneurship in restricted environments, such as inner cities.
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17 For Grootaert and Van Bastelaer (2002), social capital can be seen from a
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19 cognitive perspective, since it facilitates information sharing, collective action and
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22 decision-making through established rules, social networks and other social structures,
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24 supplemented by formal rules and procedures. This phenomenon is a result of formation
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26 of shared norms, values, trust, attitudes, and beliefs.
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29 Trust, in particular, is considered one of the central elements of social capital.
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31 According to Ostrom, Ahn, and Olivares (2003), the trust and attitude of reciprocity
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33 adopted by an individual rarely derive from the quality of their interpersonal
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35
relationship alone. Emphasizing the role of social capital in different contexts, it relates
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38 to actors' ability to guarantee benefits due to membership of social networks. For
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40 example, Maxwell, Jeffrey, and Lévesque (2011) found that entrepreneurs who received
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42 offers from investors (e.g., business angels) had trust-building behaviours, in opposition
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45 to entrepreneurs who violated trust and whose investors terminated the investment in
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47 response.
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49 Between organisations, trust reduces the need for strict monitoring and control
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mechanisms and strict rules (Dakhli and de Clercq 2004). For Fukuyama (1995), trust
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54 and honesty are motivators to reduce transaction costs. Thus, it is understood that
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56 building trust makes it possible for actors to cooperate and expect reciprocity while
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strengthening relationships between peers.
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3 Trust involves a socialisation process, which in turn leads to internalisation of a
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5 Commented [A22]: This might need some more
6 particular set of values and norms. The practical implications of social capital are broad explanation and support.
7
8 and profound, with consequences that can be beneficial or harmful. Positive results Commented [A23]: Seems a little emphatic and
9 subjective
10 include social control or compliance with rules, support and benefits mediated by extra-
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12
family networks, for example, trust, collaboration, solidarity and other values intrinsic
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15 to social capital can emerge, spread or be repressed in networks of interpersonal
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17 relationships (Narayan and Cassidy 2001). Negative results can result from
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19 opportunism, uncertainty, complexity of the environment, limited access to information
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22 and failure to alleviate the burden of transaction and bureaucratic costs (Liu, Luo and
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24 Liu 2008; Newbert and Hill 2014).
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26 Networks and institutions and also the agency of the individuals involved are all
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29 important for generation of the relational trust and reciprocity that characterise social
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31 capital. Social capital also has a positive relationship to institutions when it offers social
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33 actors autonomy for their collective voluntary actions and creation of their own rules of
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35
joint management (Ostrom 2000; Ostrom, Ahn, and Olivares 2003). In turn, formal and
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38 informal institutions can facilitate effective distribution of reliable information and offer
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40 supplementary sanctioning and monitoring capacity for the voluntary arrangements built
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42 by the individuals in a society, tending to be more profitable to the generation of social
43
44
45 capital than centralised and totalitarian systems (North 1991; Ostrom, Ahn, and Olivares
46
47 2003). Commented [A24]: It would be useful to have a summary
48 here but I am struggling to see what would be in that
49 summary apart from a list of what has been presented in the
50 literature as there is little in the way of using the literature to
build a narrative or uncover what gaps exist and why they
51 Method need answering. Try and build to a position where you
52 convince the reader there is a gap in understanding
53 surrounding social capital in social entrepreneurship –
54
Roper and Cheney (2005) show entrepreneurship is an important avenue for responsible especially since there are a few infamous papers on the
55 subject already.
56 and sustainable businesses, although its importance has been demonstrated more in
57
58 practice than in academic research. Therefore, this study also investigates this topic of
59
60 the interface between social entrepreneurship and social capital, because this field has
1
2
3 reached a level maturity that both enables and merits this review. Commented [A25]: This is good but it’s more of the type
4 of argument that I was hoping to see in the literature review,
5 and it seems to introduce another aim in to the mix. It doesn’t
6 This paper is based on a qualitative and descriptive approach, employing a belong in the methods section as far as I can see.
7
8 systematic literature review. Systematic literature reviews analyse data from the
9
10 literature about a specific topic, using systematised search methods and summarisation
11
12
of the information extracted, ensuring the reliability of results through use of scientific,
13
14
15 replicable and transparent processes (Denyer and Tranfield 2008). By adopting this
16
17 approach, this research minimises possible investigator bias, employing rigorous
18
19 methodology to enhance the credibility and validity of this research.
20
21
22 A systematic literature review was conducted, adopting criteria to identify
23
24 relevant contributions and discuss them. Searches for studies related to the subject were Commented [A26]: What specific subject?
25
26 run on the major academic databases Web of Science, Scopus and Periódicos Capes.
27
28
29 These databases were chosen because they are the most relevant to business and
30
31 management studies and included a database from the country of origin of the study.
32
33 The search strategy was defined as follows: articles published in English or Portuguese;
34
35
two advanced search strings were used in both English and Portuguese: (‘social
36
37
38 entrepreneurship’ AND ‘social capital’), (‘capital social’ AND ‘empreendedorismo
39
40 social’), (‘social entrepreneurship’ OR ‘social capital’), and (‘capital social’ OR
41
42 ‘empreendedorismo social’); the searches were run for titles, abstracts and keywords; no
43
44
45 year of publication limits were set.
46
47 The searches returned 976 papers on the Web of Science, 1215 on Scopus, and
48
49 915 on Periódicos Capes, totalling 3,106 papers. These figures are indicative of the
50
51
52
considerable body of research on the subject. The next step was to exclude duplicate
53
54 articles, book chapters, articles with errata, and conference proceedings. A more refined
55
56 filter was then applied, selecting the categories business, economics, management and
57
58
sociology, excluding other areas (since the interest of the research is mainly in the
59
60
1
2
3 business and management area). After adding the option to only select articles, the final
4
5
6 list comprised 472 articles. This process illustrated in Figure 1.
7
8
9
10 Insert Figure 1 about here please.
11
12
Figure 1: Flow diagram illustrating the systematic review process.
13
14
15
16
17 Finally, content analysis was performed, reading the articles and highlighting
18
19 their main objectives, results, and conclusions. The content analysis consisted of three
20
21
22 steps: i) data reduction; ii) data presentation; and iii) conclusions and checking (Bardin
23
24 1979). This process was conducted by two different researchers to ensure the credibility
25
26 and confirmability of the method. The data extracted in the content analysis process
27
28
29 were assigned to analytical categories and are summarised and discussed below.
30
31
32 Results and discussion
33
34
35 The content analysis process identified three main themes that recur in the articles on
36
37 social entrepreneurship supported by social capital that were identified by the database
38
39
40 searches: Creation of social capital by the social entrepreneur, Social capital and its
41
42 relationship with the institutions, and Social capital as a former of groups.
43
44 These themes will be discussed in turn after briefly covering the umbrella theme
45
46
47 of social entrepreneurship supported by social capital.
48
49
50
Social Entrepreneurship supported by Social Capital
51
52
53 Over the last 2 decades, social capital has come to be considered one of the pillars of
54
55
knowledge-based economies because it facilitates and promotes strategic connections
56
57
58 between different actors (Landry, Amara, and Lamari 2002; Maskell 2001), resulting in
59
60 social enterprises. Mair and Marti (2006) defined a social enterprise as an organisation
1
2
3 engaged in business activities to achieve social goals (for example, Narayana
4
5
6 Hrudayalaya Ltd. is an Indian public limited company offering affordable and highly-
7
8 subsidised medical services to poor people). In these terms, social enterprises are
9
10 socially oriented to change the environment, while at the same time generating
11
12
economic return and profits (Stevens, Moray, and Bruneel 2015; Strothotte and
13
14
15 Wüstenhagen 2005). Commented [A27]: This would be helpful up in the lit
16 review section when talking about social enterprise, and I’m
17 For Thornton and Flynn (2003), social capital relates to entrepreneurship at three not too sure why it’s down here because the social capital
linking isn’t clear to me. Maybe it needs to be made more
18
19 explicitly, if it’s there? How is this social entrepreneurship
different levels of analysis: network bonds between individuals, groups and their being supported by social capital as the heading of this
20 section states?
21
22 connections, and intra-business and inter-business relationships. The same authors also
23
24 state that social networks contribute significantly to entrepreneurship, considering
25
26 whether networks connect individuals, groups or firms to each other, or can unite actors
27
28
29 in contexts that favour social, financial and human capital that will promote
30
31 entrepreneurship. For example, social capital promotes production and exchange of
32
33 knowledge in research, education and commercial R&D processes (Westlund 2006).
34
35
In this context, having presented social entrepreneurship and social capital in
36
37
38 general, it is necessary to discuss these issues in a coherent manner. Thus, the objective Commented [A28]: What issues? The ones in the
39 Thornton paper? The presentation of social entrepreneurship
40 of this section is to present a theoretical discussion aiming to show how social capital and social capital in general? This whole paragraph could be
more of an introduction to the results/findings – but most of
41
42 it has been said in your lit review already.
can support development of a social enterprise in several aspects, especially those that
43 Commented [A29]: The results section? Discussion?
44
45 include the social entrepreneur, the group of people who create a collectivity in the
46
47 enterprise, and the institutions that support and regulate the business. Commented [A30]: What is a collectivity? The
48 employees of a social enterprise?
49
50
51 Creation of social capital by the social entrepreneur
52
53 Commented [A31]: This is the first time you’ve
54
Social entrepreneurs or so-called social businesspersons have deep commitments to a introduced this term? What does it mean? Is it different from
55 other terms?
56 social vision and value practices of sustainability and innovation and the capacity to
57
58 build social networks and generate viable financial returns. According to Dees (1998),
59
60 the social entrepreneur is endowed with limited resources and driven by an unshakable
1
2
3 passion to be an agent of social change and a creator of collective social solutions.
4
5
6 Therefore, a social entrepreneur can be an individual, a member of a group, or an
7
8 organisation that identifies and creatively pursues a social goal (Peredo and McLean
9
10 2006).
11
12
The objectives of social enterprises are deeply rooted in the values of their
13
14
15 founders, as they balance the motives for creating social wealth with the need for profits
16
17 and economic efficiency (Zahra et al. 2009). In their studies on social entrepreneurs,
18
19 Nga and Shamuganathan (2010) pointed out that the profile of these entrepreneurs may
20
21
22 be related to their age, since older individuals exhibited a greater propensity to embark
23
24 on collective ventures, in comparison to the individualism of young social
25
26 entrepreneurs. This factor is associated with learning acquired throughout life, since
27
28
29 social entrepreneurs tend to consider that adoption of social responsibilities offers a
30
31 good opportunity to improve their outlook on life and achieve personal goals. Commented [A32]: Are matters of age and learning
32 aspects of social capital?
33 According to Weerawardena and Mort (2006), learning, the ability to manage
34
35 Commented [A33]: I certainly agree that this type of
interpersonal relationships and accomplish goals and effective use of social skills in
36 thing is more related to social capital, but not so much
37 learning per se.
38 relational interactions can all contribute to explaining the varied outcomes of social
39
40 ventures. These elements show that social capital is central to the success of new Commented [A34]: Are these aspects specific to social
41 ventures though? They could also be true of ‘traditional’
42 developing enterprises or transitional economies because they very often suffer from ventures and so it is not the social capital making the social
43 venture special, but the aim of the venture itself.
44
45 lack of resources or liability of smallness (Freeman, Carroll, and Hannan 1983). In
46
47 contrast to commercial entrepreneurs aiming to establish legitimacy and overcome
48
49 legitimacy deficits, it is likely that social entrepreneurs will not face the same
50
51 Commented [A35]: Can commercial entrepreneurs not
52
challenges because they can use their pre-existing legacy to legitimise their social cause have pre-existing legacies?
53
54 as a strategic resource to gain access to other necessary resources (Weerawardena and
55
56 Mort 2006).
57
58
59
60
1
2
3 Moreover, the personal values of a social entrepreneur can influence the way
4
5
6 people identify themselves as social entrepreneurs as well as identifying with other
7
8 individuals belonging to social and business communities (Dacin, Dacin, and Tracey
9
10 2011). It is important to emphasise that social skills are elements of the actor's social
11
12
network or interpersonal context. These elements include the ability in social
13
14
15 interactions, established formal networks, informal social ties and access to common
16
17 communication channels (Granovetter 1992; Robins 2006). Consequently, the
18
19 interaction between organisational resources and human resources (elements of the
20
21
22 social network) generates a competitive advantage for the social enterprise
23
24 (Weerawardena and Mort 2006) because it potentiates information sharing and
25
26 externality gains (Chung, Nam and Koo. 2016). Bacq and Alt (2018) complement this
27
28
29 perspective, since they consider social entrepreneurship intentions can be motivated by
30
31 empathy and its relationship with self-efficacy and social worth. Commented [A36]: This is good, but could do with more
32 explanation as to how this complements the previous points.
33 Given the great need for interpersonal relationships in their operating network, it
34
35
can be stated that by creating social capital, an individual starts to establish social bonds
36
37
38 between the group and the institutions that will be part of their enterprise. Ansari,
39
40 Munir, and Gregg (2012) add weight to this statement, explaining that social capital is
41
42 structured around the characteristics of certain leaders who occupy central positions or
43
44
45 form focal points throughout the group that affect the network configuration. Examples
46
47 of relational social capital include family ties, friendship, business relationships, or
48
49 relationships with co-workers. Each of these relationships implies a different level of
50
51
52
proximity and trust.
53
54 In view of the above, the following proposition was ventured:
55
56 P1. Social entrepreneurs leverage social enterprises through skills that develop
57
58
social capital and support their communities.
59
60
1
2
3 Social Capital as a Former of Groups
4
5
6 The social capital approach is concerned with the collective or community capacity to
7
8 do things, where such capacities are also the properties of groups rather than just of the
9
10
11 individuals. According to Gaiger and Corrêa (2010), there is a culture of reciprocity
12
13 rooted in social capital that ensures collective insurance and creates social safety among
14
15 community members. Considering the local context in which most social enterprises are
16
17
18
established, while social capital is particularly important for the day-to-day survival of a
19
20 resource-poor community, it can also help to address the challenges faced by the
21
22 community over time (Evans 2002; Stewart 2005).
23
24
It can be stated that social capital is also related to the survival of a poor Commented [A37]: Resource poor
25
26
27 community insofar as it supports establishment of trust bonds between members. Strong
28
29 community relationships can help resolve future disputes, since established norms of
30
31 trust and respect allow for better communication and coordination within a group
32
33
34 (Ansari, Munir, and Gregg 2012). For example, Lang and Fink (2019) conducted a
35
36 study about rural social entrepreneurship on the periphery of the European Union in
37
38 challenging economic conditions. Their results showed rural social entrepreneurs
39
40
41
mobilised and reconfigured different types of social capital using horizontal and vertical
42
43 networks such as government bodies, fund-raising agencies and public research
44
45 institutions.
46
47 The cohesion of a group belonging to a social enterprise derives from the trust
48
49
50 established between the participants, but it is relevant to consider antecedents in this
51
52 relationship such as empathy, moral judgment, self-efficacy, and presence of social
53
54 support (Hockerts 2017). Trust is a central element of social capital and is developed
55
56
57 through a process of open communication and negotiations between interested parties.
58
59 Thus, the credibility of efforts is reinforced after opportunities and social needs are
60
1
2
3 identified (Shaw and Carter 2007). In order to build trust and standards of cooperation,
4
5
6 relationship stability and durability are key features that affect the motivation to
7
8 generate returns, resulting in interdependence between stability and durability.
9
10 According to Ansari, Munir, and Gregg (2012), interdependence refers to how
11
12
embedded an individual is in the social network.
13
14
15 Trust enables greater confidence in shared information and facilitates the flow of
16
17 communication through social networks established by the enterprise. According to Nga
18
19 and Shamuganathan (2010), the highest level of communication occurs in the initial
20
21
22 phase during the formation of the new business. In the initial stages, the network is
23
24 mainly associated with parties closer to the entrepreneur. This sets the impetus for long-
25
26 term functioning relationships that allow time for a mutual evaluation of personal
27
28
29 motivations and commitments in the development of social representatives. Within that
30
31 formation, reputation plays an important mediating role and is a non-replaceable social
32
33 resource in hiring, networking and the survival of the social enterprise. Therefore, the
34
35
following proposition was ventured:
36
37
38 P2. Social entrepreneurs leverage social enterprises through trust and reputation
39
40 that develop social capital and support their communities.
41
42
43
44 Social Capital and its Relationship with the Institutions
45
46 Commented [A38]: Is there evidence for this claim?
47 Social entrepreneurs tend to work in domains with little governance and supervision.
48
49 For social enterprises to be successful, alliances within their environments are needed.
50
51 In this context, institutions can support and standardise the performance of the business
52
53
54
and of the participants involved. Considering the role institutions play as creators of the
55
56 ‘rules of the game,’ a detailed examination of the institutional context is an important
57
58 element in understanding the role of entrepreneurship in economic life (Boettke and
59
60 Coyne 2009; North 1991).
1
2
3 According to Zahra et al. (2009), social capital can be used to mobilise external
4
5
6 resources and can provide a benchmark for assessing the performance of economic and
7
8 social ventures based on desired performance goals or performance compared to other
9
10 organisations. This pattern can also guide social entrepreneurs as they identify the value
11
12
of the opportunities they choose to pursue. Financial donors, for example, can also
13
14
15 apply this standard to monitor and hold the social entrepreneurs accountable or focus
16
17 their ventures on achieving better results.
18
19 Social capital is a necessary ingredient for community development and can
20
21
22 bridge the gap between those holding fewer resources and the resources available
23
24 through groups or external institutions. Ansari, Munir and Gregg (2012) argue that
25
26 understanding the interaction between business, government, and civil society is the
27
28
29 path to development of a more inclusive approach to growth. Also, if firms
30
31 communicate through members of the influential local community, who can then use
32
33 their network position to demonstrate and encourage collective learning across the
34
35
group, this can help dissipate potential resistance and increase retention of capacity.
36
37
38 Ansari, Munir and Gregg (2012) therefore stress that entrepreneurs should strive to
39
40 preserve and develop social capital through relationships, leveraging the strength of
41
42 existing links, especially influential members' ties with the rest of the group, rather than
43
44
45 attempting to restructure the existing relationships and governance norms of a
46
47 community.
48
49 In their studies on institutional barriers, Weerawardena and Mort (2006) argue
50
51
52
that social entrepreneurs do not seem to mobilise resources in such a way as to create
53
54 competitive barriers, in contrast with what has been observed in research investigating
55
56 commercial entrepreneurship. However, cultural barriers can be difficult because of a
57
58
lack of understanding of these resources. For example, in areas where literacy and
59
60
1
2
3 education rates are low, social entrepreneurs have to deal with less-skilled workers in
4
5
6 the short term. In regions without a developed transportation system, organisations face
7
8 considerable challenges when acquiring and distributing products and services. At the
9
10 same time, in economies in recession, conventional ventures may face currency
11
12
shortages, inadequate or non-existent banking systems, rampant inflation, and financial
13
14
15 constraints, such as bribery and extortion crimes.
16
17 Increasing the structural diversity in a network can influence social
18
19 entrepreneurship through collaboration with local partners such as non-governmental
20
21
22 organisations or government agencies. According to Sánchez and Ricart (2010), it is
23
24 necessary to combine, integrate and leverage the relationships ecosystem. In turn, local
25
26 partners can facilitate the growth and strength of network ties by stipulating minimum
27
28
29 local employment thresholds and providing incentives for resource transfer initiatives.
30
31 Such initiatives can occur through regular formalised meetings and actions with
32
33 community leaders, thus creating mutual trust and reciprocity and building relational
34
35
bridges of social capital. For example, Lumpkin, Bacq and Pidduck (2018) mapped
36
37
38 different communities (geographical; of identity; of interest or solidarity; and
39
40 intentional) that are related to different types of capital (physical; financial; human; and
41
42 social) to promote social entrepreneurship. They concluded that increased familiarity
43
44
45 with the local community and knowledge acquired through local institutions that build a
46
47 consensus among the interested parties enhanced the motivation to share knowledge and
48
49 build capacities. Thus, the following proposition was created:
50
51
52
P3. Social entrepreneurs leverage social enterprises through institutions that
53
54 develop social capital and support their communities.
55
56 Figure 2 illustrates how social capital can support the development of social
57
58
entrepreneurship along its three axes: individuals, groups, and institutions.
59
60
1
2
3
4
5
6
Insert Figure 2 about here please.
7
8
9 Figure 2: Social Capital as a Factor Supporting the Development of Social
10 Entrepreneurship.
11
12
13 Source: the authors (2020).
14
15
16
17 If the social relationships between the individual, social entrepreneur, and group
18
19
20 are to be strengthened, actions must be implemented that favour interaction and social
21
22 relationships between these parties. Thus, social entrepreneurs can use their social skills
23
24 to develop interpersonal relationships between actors while generating reputation and
25
26
27
building a positive image with the members who make up the social enterprise.
28
29 Establishing a connection with other actors is critical to building the trust and
30
31 cooperation that will enable common goals to be achieved. On the level of groups,
32
33
development of trust is essential for cohesion and for fostering a sense of collectivity
34
35
36 with the new venture proposal in participants. Social capital resources such as open
37
38 communication and information from trusted sources are critical for negotiation and
39
40 mutual respect between the parties, inhibiting opportunistic behaviour (Stirzaker et al.
41
42
43 2021). Moreover, social networking will facilitate coordination and collaboration
44
45 between the participants. On the level of institutions, social capital can also contribute
46
47 to mobilisation of external resources from government agencies and supporting entities
48
49
50
through creation of alliances and collaboration with local partners that identify with the
51
52 mission of the venture.
53
54
55
56
57
58
59
60
1
2
3 Final Considerations Commented [A39]: Is this a conclusion?
4
5
6 This study aimed to provide an overview of studies dealing with social capital and
7
8 social entrepreneurship. The process of consolidation of the most important themes in Commented [A40]: This is a different aim to the ones
9 mentioned previously
10
11 the current literature on the subject yielded an overview showing that, seen from several
12
13 different perspectives, social capital can be used as a driver to develop a social
14
15 enterprise insofar as it offers the elements that contribute to creation of social (and
16
17
18
economic) value. In these terms, this research makes contributions that fill several gaps
19
20 in the existing body of knowledge, improving the understanding of social
21
22 entrepreneurship and social capital.
23
24
First, the findings reinforce the relevance of social capital to promoting social
25
26
27 entrepreneurship (Rakhamani and Bhinekawati 2020). Social interaction proved to be a
28
29 powerful element in the mobilisation of social actors. Through the interaction between
30
31 social entrepreneurship and social capital, social ties are created that evolve into
32
33
34 relationships of trust and collaboration and this may be one of the great determinants of
35
36 whether people remain in social enterprises or seek the traditional market. The
37
38 collectivity that forms in these enterprises generates the necessary cohesion so that the
39
40
41
common objectives of the group are achieved, while mobilizing resources and
42
43 information and maximizing social gains.
44
45 Second, regarding institutions, the central actor's external links can create
46
47 networks and bonds of trust that will facilitate norms of reciprocity inherent to social
48
49
50 networks. Also, the enterprise’s reputation can be used as an element of competitive
51
52 advantage over competitors in the market, allowing access to credit, creating
53
54 partnerships and developing the local community as a business supporter.
55
56 Commented [A41]: How is this research contributing to
57 Third, this research contributes to more comprehensive and realistic studies on more realistic studies?
58
59 social capital and social entrepreneurship. Social entrepreneurship is a context-
60
1
2
3 dependent phenomenon that has greater repercussions in fragile institutional
4
5
6 environments in emerging countries. To compensate for lack of resources, inefficient
7
8 infra-structure systems, and arbitrary government policies, social capital leverages
9
10 social entrepreneurship because it draws together different actors such as social
11
12
entrepreneurs, groups formed by social capital, and institutions motivated by a common
13
14
15 social mission.
16
17 Finally, this discussion suggests that the interface between social entrepreneurship and
18
19 social capital is a latent field for research. In these terms, future agenda for debating
20
21
22 about these issues is presented (Figure 3).
23
24
25
26 Insert Figure 3 about here please.
27
28
29
Figure 3: Agenda for Research into Social Entrepreneurship Driven by Social Capital.
30
32
33
34
35
Despite its methodological rigor, this study has limitations. First, a set of
36
37
38 keywords was used to search for articles, but potential articles may not have included
39
40 these terms in their titles, abstracts or keywords. Second, book chapters, articles with
41
42 errata, and conference proceedings were disregarded. Third, a lack of depth due to Commented [A42]: Why are these limitations?
43
44
45 analysis of the context as a whole must be acknowledged. This study focused on
46
47 research conducted at different levels such as networks, institutions, or even with
48
49 individual social entrepreneurs. It is therefore suggested that future work investigate a
50
51
52
social enterprise as a whole in greater depth, since the structures identified may be the
53
54 origin or result of several causes or influences of social capital, often recursively.
55
56 Empirical studies are needed to determine whether the established view of social capital
57
58
as a developer of social entrepreneurship can be confirmed in real world settings, in
59
60
1
2
3 which other elements can be observed, thereby expanding possibilities for new research.
4
5
6 In addition to research on how social entrepreneurship is supported by social capital in
7
8 greater depth, more studies on the roles played by formal and informal institutions in the
9
10 process of social entrepreneurship are needed. Finding answers will require a focus on
11
12
the institutions that govern social entrepreneurship.
13
14
15
16
17 Acknowledgements
18
19 None.
20
21
22
23
24 Declaration of interest statement
25
26 No conflicts to declare.
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1
2
3
4
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1
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Figure 3: Agenda for Research into Social Entrepreneurship Driven by Social Capital.
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Social Capital as a Driver of Social Entrepreneurship

Article in Journal of Social Entrepreneurship · June 2021

Gisele Hidalgo Jefferson Marlon Monticelli

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