Abstract

http://ssrn.com/abstract=2172807
 


 



The Social Entrepreneur as Trailblazer: A Role for the Social Enterprise in a Market Economy


Jeremy P. Thornton


Samford University - Brock School of Business

Franz T. Lohrke


Samford University - School of Business; University of Alabama - Department of Management and Marketing

John Gonas


Belmont University

October 6, 2014


Abstract:     
This paper offers an alternative to the normative rationale for social entrepreneurship. We draw from the nonprofit economics literature to develop a simple theoretical model of a social entrepreneur as a profit-deviating firm. We then demonstrate how profit deviation lowers the effective cost of the firm, allowing it to recognize opportunities and enter markets previously considered unsuitable by the neoclassical entrepreneur. In doing so, the social entrepreneur generates knowledge spillovers by providing valuable ex-post entry information regarding the expected costs of a venture. In this sense, the social entrepreneur provides a public good to latent neoclassical entrepreneurs, who then may enter markets previously considered unprofitable. We illustrate the range of market conditions that are relevant for the social entrepreneur and offer a simple case study illustration of the model.

Number of Pages in PDF File: 46

Keywords: profit deviation, social entrepreneurship, entry

JEL Classification: L21, L26, L33

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Date posted: November 9, 2012 ; Last revised: October 7, 2014

Suggested Citation

Thornton, Jeremy P. and Lohrke, Franz T. and Gonas, John, The Social Entrepreneur as Trailblazer: A Role for the Social Enterprise in a Market Economy (October 6, 2014). Available at SSRN: http://ssrn.com/abstract=2172807 or http://dx.doi.org/10.2139/ssrn.2172807

Contact Information

Jeremy P. Thornton (Contact Author)
Samford University - Brock School of Business ( email )
800 Lakeshore Drive
Birmingham, AL 35229
United States
2057262128 (Phone)
Franz T. Lohrke
Samford University - School of Business ( email )
800 Lakeshore Drive
Birmingham, AL 35229
United States
University of Alabama - Department of Management and Marketing ( email )
Tuscaloosa, AL 35487
United States
John Gonas
Belmont University ( email )
1900 Belmont Blvd.
Nashville, TN 37212-3757
United States
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