Who Gives Back? Evidence from India on Successful Entrepreneurial Exit and Involvement in Philanthropy

Leena Kinger Hans () and Balagopal (Bala) Vissa ()
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Leena Kinger Hans: Organizational Behaviour, Indian School of Business, Gachibowli, Hyderabad 500111, India
Balagopal (Bala) Vissa: Entrepreneurship and Family Enterpise, INSEAD, Singapore 138676, Singapore

Organization Science, 2023, vol. 34, issue 1, 329-357

Abstract: Although successful commercial entrepreneurship has beneficial consequences for the economy, it is unclear whether it is unequivocally good for broader society. We shed light on this macro issue by delving into a specific micropathway linking commercial entrepreneurship with positive spillover effects for broader society. We ask which commercial entrepreneurs who have experienced economic success through a financial exit event from their for-profit venture engage in philanthropy—defined as systematically stimulating, supporting, and shaping social change efforts—after exit. Utilizing the status characteristics framework, we conceptualize how hierarchical positions on ascribed social status characteristics (caste and gender in our setting) and achieved social status characteristics (eliteness of Indian tertiary educational attainment and overseas tertiary educational attainment in our setting) regulate successful commercial entrepreneurs’ subsequent involvement in philanthropy. We argue that successful commercial entrepreneurs from disadvantaged ascribed-status groups or privileged achieved-status groups are more likely to transition to philanthropic activities because they more keenly perceive the need for societal change and are also more motivated to take action. Quantitative analyses on a sample of 673 Indian entrepreneurs who experienced a successful financial exit from their for-profit venture during 2003–2013, supplemented by qualitative interviews, support our theorizing. We advance management research by highlighting founder transitions from successful commercial entrepreneurship to philanthropy as a hitherto understudied mechanism driving positive social change. We thus open up new research avenues around the less-studied exit stage of entrepreneurship that allows for the integration of currently unconnected literatures around corporate philanthropy, elites, entrepreneurship, and social impact.

Keywords: entrepreneurship; organization and management theory; social responsibility; economics and organization; economic sociology; leadership (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:34:y:2023:i:1:p:329-357

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