IDEAS home Printed from https://ideas.repec.org/a/eee/worbus/v55y2020i5s1090951618300816.html
   My bibliography  Save this article

Institutional quality and inclusive strategies at the base of the pyramid

Author

Listed:
  • De Beule, Filip
  • Klein, Martin
  • Verwaal, Ernst

Abstract

Social enterprises can profit by creating social value at the base of the pyramid (BOP), thereby simultaneously helping the poor and enhancing financial performance. We submit that social impact has a positive influence on financial performance and that this relationship is positively moderated by institutional quality. We make a distinction between local and international social enterprises and investigate if international social enterprises perform better than local social enterprises and how institutional quality moderates this relationship. We collected a unique dataset of social enterprises operating in BOP markets with a broad range of institutional qualities and find support for our hypotheses.

Suggested Citation

  • De Beule, Filip & Klein, Martin & Verwaal, Ernst, 2020. "Institutional quality and inclusive strategies at the base of the pyramid," Journal of World Business, Elsevier, vol. 55(5).
  • Handle: RePEc:eee:worbus:v:55:y:2020:i:5:s1090951618300816
    DOI: 10.1016/j.jwb.2019.101066
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1090951618300816
    Download Restriction: Full text for ScienceDirect subscribers only

    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. Justin W. Webb & Geoffrey M. Kistruck & R. Duane Ireland & David J. Ketchen Jr., 2010. "The Entrepreneurship Process in Base of the Pyramid Markets: The Case of Multinational Enterprise/Nongovernment Organization Alliances," Entrepreneurship Theory and Practice, , vol. 34(3), pages 555-581, May.
    2. Tony W Tong & Todd M Alessandri & Jeffrey J Reuer & Asda Chintakananda, 2008. "How much does country matter? An analysis of firms’ growth options," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(3), pages 387-405, April.
    3. Toyah L. Miller & Curtis L. Wesley II, 2010. "Assessing Mission and Resources for Social Change: An Organizational Identity Perspective on Social Venture Capitalists‘ Decision Criteria," Entrepreneurship Theory and Practice, , vol. 34(4), pages 705-733, July.
    4. Geoffrey Desa & James L. Koch, 2014. "Scaling Social Impact: Building Sustainable Social Ventures at the Base-of-the-Pyramid," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 5(2), pages 146-174, May.
    5. Silvia Dorado, 2006. "Social Entrepreneurial Ventures: Different Values So Different Process Of Creation, No?," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 11(04), pages 319-343.
    6. Brett R. Smith & Geoffrey M. Kistruck & Benedetto Cannatelli, 2016. "The Impact of Moral Intensity and Desire for Control on Scaling Decisions in Social Entrepreneurship," Journal of Business Ethics, Springer, vol. 133(4), pages 677-689, February.
    7. Saul Estrin & Tomasz Mickiewicz & Ute Stephan, 2013. "Entrepreneurship, Social Capital, and Institutions: Social and Commercial Entrepreneurship across Nations," Entrepreneurship Theory and Practice, , vol. 37(3), pages 479-504, May.
    8. Ted London & Stuart L Hart, 2004. "Reinventing strategies for emerging markets: beyond the transnational model," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(5), pages 350-370, September.
    9. Aloysius Newenham-Kahindi & Charles E Stevens, 2018. "An institutional logics approach to liability of foreignness: The case of mining MNEs in Sub-Saharan Africa," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 881-901, September.
    10. Verwaal, Ernst & Donkers, Bas, 2003. "Customs-Related Transaction Costs, Firm Size and International Trade Intensity," Small Business Economics, Springer, vol. 21(3), pages 257-271, November.
    11. Toke S. Aidt, 2009. "Corruption, institutions, and economic development," Oxford Review of Economic Policy, Oxford University Press, vol. 25(2), pages 271-291, Summer.
    12. Alexandr Asmalovskij & Tomáš Sadílek & Vít Hinčica & Michala Mizerová, 2019. "Performance of Social Enterprises in the Czech Republic," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 10(1), pages 19-29, January.
    13. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    14. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    15. Anita M. McGahan & Michael E. Porter, 2002. "What Do We Know About Variance in Accounting Profitability?," Management Science, INFORMS, vol. 48(7), pages 834-851, July.
    16. Kibler, Ewald & Salmivaara, Virva & Stenholm, Pekka & Terjesen, Siri, 2018. "The evaluative legitimacy of social entrepreneurship in capitalist welfare systems," Journal of World Business, Elsevier, vol. 53(6), pages 944-957.
    17. Almeida, Heitor & Wolfenzon, Daniel, 2006. "Should business groups be dismantled? The equilibrium costs of efficient internal capital markets," Journal of Financial Economics, Elsevier, vol. 79(1), pages 99-144, January.
    18. Caroline Freund & Mary Hallward-Driemeier & Bob Rijkers, 2016. "Deals and Delays: Firm-level Evidence on Corruption and Policy Implementation Times," World Bank Economic Review, World Bank Group, vol. 30(2), pages 354-382.
    19. Ute Stephan & Lorraine M Uhlaner & Christopher Stride, 2015. "Institutions and social entrepreneurship: The role of institutional voids, institutional support, and institutional configurations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 46(3), pages 308-331, April.
    20. Rivera-Santos, Miguel & Rufín, Carlos, 2010. "Global village vs. small town: Understanding networks at the Base of the Pyramid," International Business Review, Elsevier, vol. 19(2), pages 126-139, April.
    21. Cuervo-Cazurra, Alvaro, 2016. "Corruption in international business," Journal of World Business, Elsevier, vol. 51(1), pages 35-49.
    22. Karolyi, G. Andrew, 2015. "Cracking the Emerging Markets Enigma," OUP Catalogue, Oxford University Press, number 9780199336623.
    23. Maurice J. G. Bun & Teresa D. Harrison, 2019. "OLS and IV estimation of regression models including endogenous interaction terms," Econometric Reviews, Taylor & Francis Journals, vol. 38(7), pages 814-827, August.
    24. William P. Wan, 2005. "Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 161-182, January.
    25. James Austin & Howard Stevenson & Jane Wei–Skillern, 2006. "Social and Commercial Entrepreneurship: Same, Different, or Both?," Entrepreneurship Theory and Practice, , vol. 30(1), pages 1-22, January.
    26. Johan Bruneel & Bart Clarysse & Stephan Weemaes & Matthias Staessens, 2018. "Breaking with the past : the need for innovation in the gouvernance of nonprofit social enterprises," Post-Print hal-02111492, HAL.
    27. Shige Makino & Takehiko Isobe & Christine M. Chan, 2004. "Does country matter?," Strategic Management Journal, Wiley Blackwell, vol. 25(10), pages 1027-1043, October.
    28. Ngobo, Paul Valentin & Fouda, Maurice, 2012. "Is ‘Good’ governance good for business? A cross-national analysis of firms in African countries," Journal of World Business, Elsevier, vol. 47(3), pages 435-449.
    29. Yung-kai Yang & Shu-ling Wu, 2015. "An Exploratory Study to Understand the Internationalization Strategies of Social Enterprises," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 6(1), pages 31-41, March.
    30. Gras, David & Mendoza-Abarca, Karla I., 2014. "Risky business? The survival implications of exploiting commercial opportunities by nonprofits," Journal of Business Venturing, Elsevier, vol. 29(3), pages 392-404.
    31. Stanley F. Slater & Eric M. Olson, 2000. "Strategy type and performance: the influence of sales force management," Strategic Management Journal, Wiley Blackwell, vol. 21(8), pages 813-829, August.
    32. Dyreng, Scott D. & Hanlon, Michelle & Maydew, Edward L. & Thornock, Jacob R., 2017. "Changes in corporate effective tax rates over the past 25 years," Journal of Financial Economics, Elsevier, vol. 124(3), pages 441-463.
    33. Miguel Rivera-Santos & Diane Holt & David Littlewood & Ans Kolk, 2015. "Social Entrepreneurship in Sub-Saharan Africa," Post-Print hal-02276715, HAL.
    34. M. Tina Dacin & Peter A. Dacin & Paul Tracey, 2011. "Social Entrepreneurship: A Critique and Future Directions," Organization Science, INFORMS, vol. 22(5), pages 1203-1213, October.
    35. John Thompson & Bob Doherty, 2006. "The diverse world of social enterprise: A collection of social enterprise stories," International Journal of Social Economics, Emerald Group Publishing, vol. 33(5/6), pages 361-375, May.
    36. Michael A. Hitt & Haiyang Li & William J. Worthington IV, 2005. "Emerging Markets as Learning Laboratories: Learning Behaviors of Local Firms and Foreign Entrants in Different Institutional Contexts," Management and Organization Review, International Association of Chinese Management Research, vol. 1(3), pages 353-380, November.
    37. Sophie Bacq & Kimberly A. Eddleston, 2018. "A Resource-Based View of Social Entrepreneurship: How Stewardship Culture Benefits Scale of Social Impact," Journal of Business Ethics, Springer, vol. 152(3), pages 589-611, October.
    38. Majid Abdi & Preet S Aulakh, 2012. "Do country-level institutional frameworks and interfirm governance arrangements substitute or complement in international business relationships?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(5), pages 477-497, June.
    39. Goddard, John & Tavakoli, Manouche & Wilson, John O.S., 2009. "Sources of variation in firm profitability and growth," Journal of Business Research, Elsevier, vol. 62(4), pages 495-508, April.
    40. Alan Atkisson & R. Lee Hatcher, 2001. "The Compass Index Of Sustainability: Prototype For A Comprehensive Sustainability Information System," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 509-532.
    41. Hawawini, Gabriel & Subramanian, Venkat & Verdin, Paul, 2004. "The home country in the age of globalization: how much does it matter for firm performance?," Journal of World Business, Elsevier, vol. 39(2), pages 121-135, May.
    42. Abhijit V. Banerjee & Esther Duflo, 2007. "The Economic Lives of the Poor," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 141-168, Winter.
    43. Hitt, Michael A. & Li, Haiyang & Worthington, William J., 2005. "Emerging Markets as Learning Laboratories: Learning Behaviors of Local Firms and Foreign Entrants in Different Institutional Contexts," Management and Organization Review, Cambridge University Press, vol. 1(3), pages 353-380, November.
    44. Andrew Delios & Paul W. Beamish, 1999. "Ownership strategy of Japanese firms: transactional, institutional, and experience influences," Strategic Management Journal, Wiley Blackwell, vol. 20(10), pages 915-933, October.
    45. Robin Stevens & Nathalie Moray & Johan Bruneel & Bart Clarysse, 2015. "Attention allocation to multiple goals: The case of for-profit social enterprises," Strategic Management Journal, Wiley Blackwell, vol. 36(7), pages 1006-1016, July.
    46. Hoogendoorn, B. & van der Zwan, P.W. & Thurik, A.R., 2011. "Social Entrepreneurship and Performance: The Role of Perceived Barriers and Risk," ERIM Report Series Research in Management ERS-2011-016-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    47. Anita M McGahan & Rogerio Victer, 2010. "How much does home country matter to corporate profitability?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(1), pages 142-165, January.
    48. Johanna Mair & Ignasi Marti, 2006. "Social Entrepreneurship Research: A Source of Explanation, Prediction, and Delight," Post-Print hal-02311880, HAL.
    49. Kafouros, Mario & Aliyev, Murod, 2016. "Institutional development and firm profitability in transition economies," Journal of World Business, Elsevier, vol. 51(3), pages 369-378.
    50. Paul N. Bloom & Brett R. Smith, 2010. "Identifying the Drivers of Social Entrepreneurial Impact: Theoretical Development and an Exploratory Empirical Test of SCALERS," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 1(1), pages 126-145, March.
    51. Andrew B. Bernard & Marco Grazzi & Chiara Tomasi, 2015. "Intermediaries in International Trade: Products and Destinations," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 916-920, October.
    52. Fiona Wilson & James Post, 2013. "Business models for people, planet (& profits): exploring the phenomena of social business, a market-based approach to social value creation," Small Business Economics, Springer, vol. 40(3), pages 715-737, April.
    53. Peredo, Ana María & McLean, Murdith, 2006. "Social entrepreneurship: A critical review of the concept," Journal of World Business, Elsevier, vol. 41(1), pages 56-65, February.
    54. Filipe Santos, 2012. "A Positive Theory of Social Entrepreneurship," Journal of Business Ethics, Springer, vol. 111(3), pages 335-351, December.
    55. Cheng, Hsiang-Lin & Yu, Chow-Ming Joseph, 2008. "Institutional pressures and initiation of internationalization: Evidence from Taiwanese small- and medium-sized enterprises," International Business Review, Elsevier, vol. 17(3), pages 331-348, June.
    56. David M. Townsend & Timothy A. Hart, 2008. "Perceived Institutional Ambiguity and the Choice of Organizational Form in Social Entrepreneurial Ventures," Entrepreneurship Theory and Practice, , vol. 32(4), pages 685-700, July.
    57. Cherrier, Helene & Goswami, Paromita & Ray, Subhasis, 2018. "Social entrepreneurship: Creating value in the context of institutional complexity," Journal of Business Research, Elsevier, vol. 86(C), pages 245-258.
    58. Elitsa R Banalieva & Alvaro Cuervo-Cazurra & Ravi Sarathy, 2018. "Dynamics of pro-market institutions and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 858-880, September.
    59. Matthias Staessens & Pieter Jan Kerstens & Johan Bruneel & Laurens Cherchye, 2019. "Data Envelopment Analysis and Social Enterprises: Analysing Performance, Strategic Orientation and Mission Drift," Journal of Business Ethics, Springer, vol. 159(2), pages 325-341, October.
    60. Stephen Brammer & Andrew Millington, 2008. "Does it pay to be different? An analysis of the relationship between corporate social and financial performance," Strategic Management Journal, Wiley Blackwell, vol. 29(12), pages 1325-1343, December.
    61. Klaus E Meyer & Mike W Peng, 2005. "Probing theoretically into Central and Eastern Europe: transactions, resources, and institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(6), pages 600-621, November.
    62. Garry D. Bruton & David Ahlstrom & Krzysztof Obloj, 2008. "Entrepreneurship in Emerging Economies: Where Are We Today and Where Should the Research Go in the Future," Entrepreneurship Theory and Practice, , vol. 32(1), pages 1-14, January.
    63. Miguel Rivera-Santos & Carlos Rufin, 2010. "Global village vs. small town : Understanding networks at the Base of the Pyramid," Post-Print hal-02313131, HAL.
    64. Oetzel, Jennifer & Doh, Jonathan P., 2009. "MNEs and development: a review and reconceptualization," Journal of World Business, Elsevier, vol. 44(2), pages 108-120, April.
    65. Gordon Liu & Teck–Yong Eng & Sachiko Takeda, 2015. "An Investigation of Marketing Capabilities and Social Enterprise Performance in the UK and Japan," Entrepreneurship Theory and Practice, , vol. 39(2), pages 267-298, March.
    66. Petrou, Andreas P., 2015. "Arbitrariness of corruption and foreign affiliate performance: A resource dependence perspective," Journal of World Business, Elsevier, vol. 50(4), pages 826-837.
    67. Gordon E. Shockley & Peter M. Frank, 2011. "The functions of government in social entrepreneurship: theory and preliminary evidence," Regional Science Policy & Practice, Wiley Blackwell, vol. 3(3), pages 181-198, August.
    68. De Beule, Filip & Sels, Annabel, 2016. "Do innovative emerging market cross-border acquirers create more shareholder value? Evidence from India," International Business Review, Elsevier, vol. 25(2), pages 604-617.
    69. Miguel Rivera-Santos & Diane Holt & David Littlewood & Ans Kolk, 2015. "Social Entrepreneurship in Sub-Saharan Africa," Post-Print hal-02311966, HAL.
    70. Lumpkin, G. T. & Dess, Gregory G., 2001. "Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle," Journal of Business Venturing, Elsevier, vol. 16(5), pages 429-451, September.
    71. Johan Wiklund & DEAN Shepherd, 2003. "Knowledge‐based resources, entrepreneurial orientation, and the performance of small and medium‐sized businesses," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1307-1314, December.
    72. Sophie Bacq & Chantal Hartog & Brigitte Hoogendoorn, 2013. "A Quantitative Comparison of Social and Commercial Entrepreneurship: Toward a More Nuanced Understanding of Social Entrepreneurship Organizations in Context," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 4(1), pages 40-68, March.
    73. Boubakri, Narjess & Cosset, Jean-Claude & Guedhami, Omrane, 2005. "Liberalization, corporate governance and the performance of privatized firms in developing countries," Journal of Corporate Finance, Elsevier, vol. 11(5), pages 767-790, October.
    74. Deepa Narayan & Robert Chambers & Meera K. Shah & Patti Petesch, 2000. "Voices of the Poor : Crying Out for Change," World Bank Publications, The World Bank, number 13848, June.
    75. Guangrui Guo, 2017. "Demystifying variance in performance: A longitudinal multilevel perspective," Strategic Management Journal, Wiley Blackwell, vol. 38(6), pages 1327-1342, June.
    76. Boris Urban, 2015. "An Exploratory Study on Outcomes of Social Enterprises in South Africa," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 271-297, June.
    77. Christine M. Chan & Takehiko Isobe & Shige Makino, 2008. "Which country matters? Institutional development and foreign affiliate performance," Strategic Management Journal, Wiley Blackwell, vol. 29(11), pages 1179-1205, November.
    78. Ilias A. Makris, 2017. "Analysing the effect of macroeconomic characteristics, on firm performance: evidence from selected countries of Eurozone," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 13(2), pages 190-202.
    79. Mair, Johanna & Martí, Ignasi, 2006. "Social entrepreneurship research: A source of explanation, prediction, and delight," Journal of World Business, Elsevier, vol. 41(1), pages 36-44, February.
    80. Mair, Johanna & Marti, Ignasi, 2009. "Entrepreneurship in and around institutional voids: A case study from Bangladesh," Journal of Business Venturing, Elsevier, vol. 24(5), pages 419-435, September.
    81. Sandeep Goyal & Bruno S Sergi & Mahadeo Jaiswal, 2015. "How to Design and Implement Social Business Models for Base-of-the-Pyramid (BoP) Markets?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(5), pages 850-867, 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. Alon, Ilan & Mersland, Roy & Musteen, Martina & Randøy, Trond, 2020. "The research frontier on internationalization of social enterprises," Journal of World Business, Elsevier, vol. 55(5).

    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:eee:worbus:v:55:y:2020:i:5:s1090951618300816. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620401/description#description .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.