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Profit with Purpose? A Theory of Social Enterprise

Timothy Besley () and Maitreesh Ghatak ()

American Economic Journal: Economic Policy, 2017, vol. 9, issue 3, 19-58

Abstract: When social benefits cannot be measured, an organization that selects managers based on pro-social motivation can be used to balance profits with a social purpose. This paper develops a model of social enterprise based on selection of citizen-managers to run firms with flexible missions. We analyze organizational choice between social enterprise, for-profits, and nonprofits. The paper also develops the implications of matching between founders and managers based on their preferences for the mission.

JEL-codes: D21 L21 L31 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/pol.20150495
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