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Can Social Enterprises Be Sustainable Through Innovation and Social Performance‐Based Incentives?

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  • Chungwon Woo
  • Hosung Son

Abstract

This study explores how technology orientation and the innovativeness of social entrepreneurship enhance the financial and social performance of social enterprises through technology development capability. Drawing on the resource‐based view, composition‐based view, and contagion theory, the study empirically examines the mediating role of technology development capability and the moderating effect of social performance‐based monetary incentives. Based on data from the Social Progress Credit program in South Korea, results show that technology orientation and innovativeness of social entrepreneurship significantly strengthen technology development capability, which positively affects financial performance. However, no significant relationship is found between capability and social performance. Furthermore, monetary incentives increase the effect on financial performance but show limited influence on social performance. These findings contribute to understanding how internal innovation capabilities and external incentive mechanisms interact in social enterprises, offering practical implications for designing context‐sensitive strategies that support sustainable value creation in social enterprises.

Suggested Citation

  • Chungwon Woo & Hosung Son, 2025. "Can Social Enterprises Be Sustainable Through Innovation and Social Performance‐Based Incentives?," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(5), pages 7148-7165, October.
    • Handle: RePEc:wly:sustdv:v:33:y:2025:i:5:p:7148-7165
    DOI: 10.1002/sd.3500
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