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Profit with purpose? A theory of social enterprise

Timothy Besley () and Maitreesh Ghatak ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 non-profits. The paper also develops the implications of matching between founders and managers based on their preferences for the mission.

JEL-codes: N0 J50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic, nep-sbm and nep-soc
Date: 2017-08-01
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Published in American Economic Journal: Economic Policy, 1, August, 2017, 9(3), pp. 19-58. ISSN: 1945-7731

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