How Does Revenue Diversification Affect the Financial Health of Sustainable Entrepreneurship Organizations in China? A Fuzzy Set Qualitative Comparative Analysis

Xiao-Min Yu ()
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Xiao-Min Yu: School of Sociology, Beijing Normal University, 19 Xinjiekou Wai St., Beijing 100875, China

Sustainability, 2025, vol. 17, issue 10, 1-17

Abstract: The past decade has witnessed the bourgeoning development of sustainable entrepreneurship organizations (SEOs) that are engaging in advancing sustainable development in China. Revenue diversification is often considered by policymakers, scholars, and practitioners to be a desirable strategy for improving the financial health and organizational sustainability of SEOs and other types of hybrid organizations. However, previous studies on the benefits of revenue diversification for hybrid organizations have not reached a definitive conclusion, and the empirical literature has devoted little attention to the financial outcomes of revenue diversification in the SEO context. To address these knowledge gaps, this study uses fuzzy set qualitative comparative analysis to investigate how revenue diversification and organizational conditions interact to conjunctively affect the multidimensional financial health of SEOs in the Chinese context. This study identifies divergent configurations for high and low levels of financial health in four dimensions and across different types of SEOs. The results show that revenue diversification generates benefits primarily for large, established for-profit SEOs in terms of enhancing their financial flexibility but produces no observed improvements in financial flexibility, efficiency, profitability, or growth among nonprofit SEOs. These findings contribute to the sustainable entrepreneurship and sustainability literature in diverse ways, with valuable practical implications for SEO practitioners and major stakeholders.

Keywords: sustainable entrepreneurship organizations; revenue diversification; organizational feature; sustainable development; fsQCA (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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