Managing the external financing constraints of social enterprises: A systematic review of a diversified research landscape

Abstract

Social enterprises, located between non-profit organisations and for-profit firms, often struggle to acquire external funding. An increasing amount of research on the external financing of social enterprises stems from a fragmented body of the literature anchored in a variety of subject areas (e.g. entrepreneurship, public sector management, general management and strategy). We systematically review 204 academic articles published between 1998 and 2021 to bridge the knowledge gaps in these subject areas by: (1) mapping the field of the external financing of social enterprises at the individual, organisational and institutional levels; (2) synthesising the findings to develop an overarching framework; and (3) discussing theoretically sound future research avenues. We find that research at the individual level focuses primarily on investors' perspective of the ideal characteristics of a social entrepreneur. Research at the organisational level often addresses the dual logics of social enterprises and their impact on the successful financing of these businesses and the role of investor-investee collaboration.Research at the institutional level can be clustered into cultural, economic, political and legal factors. Overall, we stress the need for research that adopts an overarching view by considering all three levels of analysis simultaneously and using organisational and economic theories.

The influence of society’s perception, social networking and social impact measurement on access to finance of social enterprises: Perspective of eThekwini Municipality, KwaZulu-Natal, South Africa.

“…Findings from other studies reveal impact measurement is used to legitimise prior engagement between SEs and funders, but the closeness of the relationship developed is what determines the sustainability of the access to finance (Lall, 2019;Molecke & Pinkse, 2017). The findings in this study, however, contradict several other studies, with regard to investors being attracted to SEs conducting social impact measurement, serving as a tool in accessing finance for SEs (Urmanaviciene & Mendis, 2021;Clifford et al, 2013;Schätzlein et al, 2022).…”

Does the Social Enterprise Ecosystem Facilitate the Growth of Social Enterprises? An Extended Case Study of Taiwan, China

“…Cross-departmental cooperation and the government's leadership and coordination are critical to building an effective and supportive SE ecosystem [3,17] . Having an orderly deployment of resources is more important than resource delivery [50] . Despite the promotion of the "industry-government-academy-research" model in the local context and the government's actions to absorb the private sector's views in some policy formulation, in practice, the private sector or third sector does not have the right to participate in the entire SE development policy-making process.…”

Análisis sistemático de la intersección entre sostenibilidad y desempeño financiero en las pequeñas y medianas empresas. Un estudio de revisión

“…El tercer artículo más citado en nuestra tabla (Schätzlein et al, 2023) ofrece una revisión sistemática de la gestión de las limitaciones de financiación externa en las empresas sociales. Esta investigación subraya el enfoque creciente en los desafíos y las limitaciones de la financiación como factores críticos en la sostenibilidad de las Pymes.…”