The Resource-Based Paradox of Impact-Oriented Strategies: A Study in the Context of Microcredit

42 Pages Posted: 12 Jun 2020

See all articles by Leandro Nardi

Leandro Nardi

HEC Paris - S&O Institute

Sergio G. Lazzarini

Insper Institute of Education and Research

Sandro Cabral

Insper Institute of Education and Research

Date Written: January 26, 2020

Abstract

Focusing on impact-oriented strategies, we study a resource-based paradox rooted in a trade-off between effectiveness and inclusiveness. Using a unique dataset of 6,000 microcredit loan applications received by an impact-oriented microfinance firm, we study the role of three resource types: financial, relational and human capital. Our results confirm our proposed resource-based paradox: while certain resource configurations improve entrepreneurs’ ability to generate rents from microloans (higher effectiveness), these gains are only reaped by the restricted set of entrepreneurs with access to those specific configurations (lower inclusiveness). We contribute to the research-based literature by demonstrating how resources influence the ability of impact-oriented strategies to generate gains for target populations, and by expanding the applicability of resource-based theories to the context of businesses designed to promote positive societal impact.

Keywords: impact-oriented strategies, resources, microcredit.

Suggested Citation

Nardi, Leandro and Lazzarini, Sergio Giovanetti and Cabral, Sandro, The Resource-Based Paradox of Impact-Oriented Strategies: A Study in the Context of Microcredit (January 26, 2020). Available at SSRN: https://ssrn.com/abstract=3604722 or http://dx.doi.org/10.2139/ssrn.3604722

Leandro Nardi (Contact Author)

HEC Paris - S&O Institute ( email )

1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
France

Sergio Giovanetti Lazzarini

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil
55-11-45042387 (Phone)

Sandro Cabral

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

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