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

Thornton, J., Lohrke, F., Gonas, J.(2015). The Social Entrepreneur as Trailblazer - A Role for the Social Enterprise in a Market Economy. ACRN Oxford Journal of Finance and Risk Perspectives, 4(4). 145-167

46 Pages Posted: 9 Nov 2012 Last revised: 8 Dec 2016

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

Date Written: 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.

Keywords: profit deviation, social entrepreneurship, entry

JEL Classification: L21, L26, L33

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). Thornton, J., Lohrke, F., Gonas, J.(2015). The Social Entrepreneur as Trailblazer - A Role for the Social Enterprise in a Market Economy. ACRN Oxford Journal of Finance and Risk Perspectives, 4(4). 145-167. Available at SSRN: https://ssrn.com/abstract=2172807 or http://dx.doi.org/10.2139/ssrn.2172807

Jeremy P. Thornton (Contact Author)

Samford University - Brock School of Business ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States
2057262128 (Phone)

HOME PAGE: http://https://www.samford.edu/business/directory/Thornton-Jeremy

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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