Trade-off or Trade up: Financial and Social Performance in Social Enterprises

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It is widely believed that a trade-off exists between the financial and social performance of social enterprises. We draw attention to how social enterprises’ business models influence the relationship between their financial and social performance. We investigate the financial-social performance relationship in a sample of 912 social enterprises in nine different countries. We focus on the moderating role of their business model on that relationship. The results show no trade-off between financial and social performance, but rather a complementary relationship. Moreover, we find that some business models amplify the positive relationship between financial and social performance, while others make it weaker.

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