Fostering an environment for social entrepreneurship: a comparative analysis across economic development levels

Abstract Social entrepreneurship has been lauded for its positive contributions to global economic and social development goals. Yet, how and in what ways varying institutional environments and economic development levels have spurred social entrepreneurial ventures remains a highly debated concept. It remains unclear whether (or not) social ventures are most likely to emerge within developing nations with weak and ineffective institutional structures or from developed nations with more established and supportive institutional mechanisms. Therefore, this study responds to this debate and provides comparative evidence on how varying national economic development levels constrain or enable social entrepreneurship behavior. The study combines data from the Global Entrepreneurship Monitor, the World Development Indicators, the Index of Economic Freedom, and the World Governance Indicators to develop a multi-level mixed-effects model. It uses a sample of 124,642 individuals from 59 (9 factor-, 27 efficiency-, and 23 innovation-driven) countries. The results indicate a positive association with informal institutional mechanisms influencing global social venture formation. However, disparate observations on how some formal institutional factors influence social venture across economic development levels were observed, raising essential questions about formal institutional support mechanisms' influence.