Value Creation Mechanism of Social Enterprises in Manufacturing Industry: Empirical Evidence from Korea

Hosung Son, Joosung Lee and Yanghon Chung
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Hosung Son: School of Business and Technology Management, College of Business, Korea Advanced Institute of Science and Technology, Gwahak-ro 335, Yuseong-gu, Daejeon 34141, Korea
Joosung Lee: Management of Innovation Program, Daegu Gyeongbuk Institute of Science and Technology, Techno Jungang-daero 333, Hyeonpung-myeon, Dalseong-gun, Daegu 42988, Korea
Yanghon Chung: School of Business and Technology Management, College of Business, Korea Advanced Institute of Science and Technology, Gwahak-ro 335, Yuseong-gu, Daejeon 34141, Korea

Sustainability, 2017, vol. 10, issue 1, 1-24

Abstract: A variety of social enterprises (SEs) have recently emerged in many different countries in an effort to resolve diverse social problems. However, the value creation mechanism of SEs has not yet been disclosed. The purpose of this study is to reveal the value creation mechanism of SEs in manufacturing industry. To do so, we verify the role of social entrepreneurship and examine the effects of product innovation attributes and social capital on social value creation and financial performance by using structural equation modelling. Then, we conduct interviews with six experts in SE fields. According to the results of empirical study, the social entrepreneurship works as an antecedent of product innovation and social capital in SEs and the degrees of products’ simplicity, usability and standardization positively affect the social value creation of SEs. In addition, the social value creation works as a complete mediator between the product innovation of SEs and their financial performance. The interviews suggest policy implications for successful social value creation and sustainability of SEs. This research contributes towards further studies on innovation of SEs and provides social entrepreneurs with guidelines in planning their innovation strategy or developing their products.

Keywords: social enterprise; value creation; product innovation; social capital; social value (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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