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Business model innovation, legitimacy and performance: social enterprises in China

Zhong Wang (School of Business Administration, Hunan University, Changsha, China)
Yating Zhou (School of Business Administration, Hunan University, Changsha, China)

Management Decision

ISSN: 0025-1747

Article publication date: 3 March 2020

Issue publication date: 29 October 2021

1500

Abstract

Purpose

Social enterprises pursue growth through business model innovation, and acquiring legitimacy is critical to ensuring such innovation. The purpose of this paper is to examine how business model innovation and legitimacy affect the performance of new social enterprises during different development stages.

Design/methodology/approach

This paper uses the hierarchical regression analysis and fuzzy-set qualitative comparative analysis (fsQCA) to examine social enterprise performance and constructs and verifies a moderated mediation effect of business model innovation, based on a survey of 183 new social enterprises in China.

Findings

This paper finds that business model innovation has a positive effect on social enterprise performance and an organization's legitimacy, acting as the partial mediator between them. The mediating effect of legitimacy is more positive when social enterprises are in the early growth stage. A more detailed analysis of fsQCA explores the necessary and sufficient conditions for the growth of social enterprise performance across different stages and reveals five configurations that improve the performance of social enterprises.

Practical implications

This study explores the role of business model innovation and legitimacy in social enterprise growth and provides empirical evidence about the causal configuration of high-performing social enterprises.

Originality/value

This research clarifies two antecedents of social enterprise performance and proposes a more inclusive framework that addresses the factor of dynamic development stages. This paper deepens the understanding of social enterprise performance in China.

Keywords

Acknowledgements

The papers form part of special section “Social Innovation and Entrepreneurship in the Sharing Economy”, guest edited by Wenzhi Zheng, Jun Yang, Yenchun Jim Wu and Chunpei Lin.The authors gratefully acknowledge Major Project in Hunan Province “Women’s Theory and Practice” (19ZDB03) and Hunan Province Teaching Reform Research Project 2017 for financial support.

Citation

Wang, Z. and Zhou, Y. (2021), "Business model innovation, legitimacy and performance: social enterprises in China", Management Decision, Vol. 59 No. 11, pp. 2693-2712. https://doi.org/10.1108/MD-05-2019-0678

Publisher

:

Emerald Publishing Limited

Copyright © 2020, Emerald Publishing Limited

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