IDEAS home Printed from https://ideas.repec.org/a/kap/porgrv/v22y2022i1d10.1007_s11115-021-00570-0.html
   My bibliography  Save this article

Social Capital and Financial Performance in Nonprofits

Author

Listed:
  • Scott Dell

    (Francis Marion University)

  • Meena Subedi

    (University of Wisconsin at Whitewater)

  • Maxwell K. Hsu

    (University of Wisconsin at Whitewater)

  • Ali Farazmand

    (Florida Atlantic University)

Abstract

Nonprofits provide services for the common good and are having an increasing influence on the economy over time. There is consensus among prior studies in for-profit settings that social capital positively influences corporate financial performance. In contrast, this study analyzes the association between social capital and nonprofit organizations’ financial performance. Nonprofits headquartered in high social capital regions are expected to have better oversight from the community participants and better networking opportunities for the community participants. Thus, we expect and provide evidence that social capital is positively associated with nonprofits’ financial performance.

Suggested Citation

  • Scott Dell & Meena Subedi & Maxwell K. Hsu & Ali Farazmand, 2022. "Social Capital and Financial Performance in Nonprofits," Public Organization Review, Springer, vol. 22(1), pages 193-210, March.
    • Handle: RePEc:kap:porgrv:v:22:y:2022:i:1:d:10.1007_s11115-021-00570-0
    DOI: 10.1007/s11115-021-00570-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11115-021-00570-0
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11115-021-00570-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hoje Jo & Maretno Harjoto, 2011. "Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 103(3), pages 351-383, October.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1251-1288.
    3. Jonathan L Calof, 1994. "The Relationship Between Firm Size and Export Behavior Revisited," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 367-387, June.
    4. John F. Helliwell, 2006. "Well-Being, Social Capital and Public Policy: What's New?," Economic Journal, Royal Economic Society, vol. 116(510), pages 34-45, March.
    5. Javakhadze, David & Ferris, Stephen P. & French, Dan W., 2016. "Social capital, investments, and external financing," Journal of Corporate Finance, Elsevier, vol. 37(C), pages 38-55.
    6. Cooke, Philip & Wills, David, 1999. "Small Firms, Social Capital and the Enhancement of Business Performance through Innovation Programmes," Small Business Economics, Springer, vol. 13(3), pages 219-234, November.
    7. Ali Farazmand, 2017. "Governance Reforms: the Good, the Bad, and the Ugly; and the Sound: Examining the Past and Exploring the Future of Public Organizations," Public Organization Review, Springer, vol. 17(4), pages 595-617, December.
    8. Gregory D. Saxton & Michelle A. Benson, 2005. "Social Capital and the Growth of the Nonprofit Sector," Social Science Quarterly, Southwestern Social Science Association, vol. 86(1), pages 16-35, March.
    9. Ulf Andersson & Mats Forsgren & Ulf Holm, 2015. "The Strategic Impact of External Networks: Subsidiary Performance and Competence Development in the Multinational Corporation," Palgrave Macmillan Books, in: Mats Forsgren & Ulf Holm & Jan Johanson (ed.), Knowledge, Networks and Power, chapter 13, pages 318-343, Palgrave Macmillan.
    10. Ali Farazmand, 2012. "Sound Governance: Engaging Citizens through Collaborative Organizations," Public Organization Review, Springer, vol. 12(3), pages 223-241, September.
    11. Cyril F. CHANG & Howard P. TUCKMAN, 1991. "Financial Vulnerability And Attrition As Measures Of Nonprofit Performance," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 62(4), pages 655-672, October.
    12. Ohlson, Ja, 1980. "Financial Ratios And The Probabilistic Prediction Of Bankruptcy," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 109-131.
    13. Laitinen, Erkki K. & Suvas, Arto, 2016. "Financial distress prediction in an international context: Moderating effects of Hofstede’s original cultural dimensions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 9(C), pages 98-118.
    14. Keating, Elizabeth K. & Fischer, Mary & Gordon, Teresa P. & Greenlee, Janet, 2005. "Assessing Financial Vulnerability in the Nonprofit Sector," Working Paper Series rwp05-002, Harvard University, John F. Kennedy School of Government.
    15. Bhandari, Avishek & Golden, Joanna, 2021. "CEO political preference and credit ratings," Journal of Corporate Finance, Elsevier, vol. 68(C).
    16. Ferris, Stephen P. & Javakhadze, David & Rajkovic, Tijana, 2017. "CEO social capital, risk-taking and corporate policies," Journal of Corporate Finance, Elsevier, vol. 47(C), pages 46-71.
    17. Richard Lambert & Christian Leuz & Robert E. Verrecchia, 2007. "Accounting Information, Disclosure, and the Cost of Capital," Journal of Accounting Research, Wiley Blackwell, vol. 45(2), pages 385-420, May.
    18. Brick, Ivan E. & Chidambaran, N.K., 2010. "Board meetings, committee structure, and firm value," Journal of Corporate Finance, Elsevier, vol. 16(4), pages 533-553, September.
    19. Daniel J. Hopkins, 2011. "Translating into Votes: The Electoral Impacts of Spanish‐Language Ballots," American Journal of Political Science, John Wiley & Sons, vol. 55(4), pages 814-830, October.
    20. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
    21. Meena Subedi & Ali Farazmand, 2020. "Economic Value Added (EVA) for Performance Evaluation of Public Organizations," Public Organization Review, Springer, vol. 20(4), pages 613-630, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saif Ur Rahman & Zhao Shurong & Qasim Jan, 2023. "Social Media and Authoritarian Legacies: the Impact of Military Aligned Social Media Activists (SMAs) on Politics," Public Organization Review, Springer, vol. 23(2), pages 715-737, June.
    2. Scott Dell & Meena Subedi & Maxwell K. Hsu & Ali Farazmand, 2023. "The Independent Audit for Nonprofits: Does it Make a Difference?," Public Organization Review, Springer, vol. 23(4), pages 1437-1453, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Scott Dell & Meena Subedi & Maxwell K. Hsu & Ali Farazmand, 2023. "The Independent Audit for Nonprofits: Does it Make a Difference?," Public Organization Review, Springer, vol. 23(4), pages 1437-1453, December.
    2. Fogel, Kathy & Jandik, Tomas & McCumber, William R., 2018. "CFO social capital and private debt," Journal of Corporate Finance, Elsevier, vol. 52(C), pages 28-52.
    3. Mansoor Afzali & Minna Martikainen, 2021. "Network centrality and value relevance of insider trading: Evidence from Europe," The Financial Review, Eastern Finance Association, vol. 56(4), pages 793-819, November.
    4. Xing, Jieli & Zhang, Yongjie & Xiong, Xiong, 2023. "Social capital, independent director connectedness, and stock price crash risk," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 786-804.
    5. Bhuyan, Md Nazmul Hasan & Subedi, Meena & Akter, Maimuna, 2022. "CEO-friendly boards and seasoned equity offerings," Journal of Behavioral and Experimental Finance, Elsevier, vol. 36(C).
    6. Bhandari, Avishek & Javakhadze, David, 2017. "Corporate social responsibility and capital allocation efficiency," Journal of Corporate Finance, Elsevier, vol. 43(C), pages 354-377.
    7. Hasan, Iftekhar & He, Qing & Lu, Haitian, 2020. "The impact of social capital on economic attitudes and outcomes," Journal of International Money and Finance, Elsevier, vol. 108(C).
    8. Stephen P. Ferris & David Javakhadze & Tijana Rajkovic, 2019. "An international analysis of CEO social capital and corporate risk‐taking," European Financial Management, European Financial Management Association, vol. 25(1), pages 3-37, January.
    9. Alejandro Rodriguez, 2019. "Defining Governance in Latin America," Public Organization Review, Springer, vol. 19(1), pages 5-19, March.
    10. Gareth D. Leeves, 2014. "Increasing returns to education and the impact on social capital," Education Economics, Taylor & Francis Journals, vol. 22(5), pages 449-470, October.
    11. Shao, Yan & Sun, Lingxia, 2021. "Entrepreneurs’ social capital and venture capital financing," Journal of Business Research, Elsevier, vol. 136(C), pages 499-512.
    12. Yoji Kunimitsu, 2015. "Regional Factors Affecting the Satisfaction of Residents: Evidence from a Structural Equation Model in Japan," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 483-497, January.
    13. Francisco Pinheiro Catalão & Carlos Oliveira Cruz & Joaquim Miranda Sarmento, 2023. "Public Sector Corruption and Accountability in Cost Deviations and Overruns of Public Projects," Public Organization Review, Springer, vol. 23(3), pages 1105-1126, September.
    14. Stefano Bartolini & Francesco Sarracino, 2014. "It's not the economy, stupid! How social capital and GDP relate to happiness over time," Papers 1411.2138, arXiv.org.
    15. Goeschl, Timo & Jarke, Johannes, 2014. "Trust, but verify? When trustworthiness is observable only through (costly) monitoring," WiSo-HH Working Paper Series 20, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    16. Wang, Xu & Deng, Shengliang & Alon, Ilan, 2021. "Women executives and financing pecking order of GEM-listed companies: Moderating roles of social capital and regional institutional environment," Journal of Business Research, Elsevier, vol. 136(C), pages 466-478.
    17. Shoukat Ali & Ramiz ur Rehman & Wang Yuan & Muhammad Ishfaq Ahmad & Rizwan Ali, 2022. "Does foreign institutional ownership mediate the nexus between board diversity and the risk of financial distress? A case of an emerging economy of China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(3), pages 553-581, September.
    18. Aneta Oniszczuk-Jastrząbek & Ernest Czermański & Giuseppe T. Cirella, 2020. "Sustainable Supply Chain of Enterprises: Value Analysis," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    19. Mikucka, Malgorzata & Sarracino, Francesco & Dubrow, Joshua K., 2017. "When Does Economic Growth Improve Life Satisfaction? Multilevel Analysis of the Roles of Social Trust and Income Inequality in 46 Countries, 1981–2012," World Development, Elsevier, vol. 93(C), pages 447-459.
    20. Urszula Markowska-Przybyła & David M. Ramsey, 2018. "Social Capital and Long-Term Regional Development within Poland in the Light of Experimental Economics and Data from a Questionnaire," Sustainability, MDPI, vol. 10(9), pages 1-26, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:porgrv:v:22:y:2022:i:1:d:10.1007_s11115-021-00570-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.