Unraveling the institutional paradox of social entrepreneurship: Evidence from pro-market institutions

Abstract

This study extends the discussion on the institutional paradox of social entrepreneurship (SE), which argues that both institutional void and institutional support can spur SE engagement. We contribute by adding the scope of pro-market institutions while investigating the two seemingly contradictory mechanisms of institutional void and support. Using data from the Global Entrepreneurship Monitor (GEM), we find that institutional support dominates the process of how pro-market institutions affect SE activities, leading to a positive relationship. However, the institutional void still matters because we also find a positive relationship between unmet basic human needs and SE engagement, and the positive effect of pro-market institutions diminishes in countries with more unmet basic human needs.