Published in: Business & Society, 57(6), 1150-1190,
Cited as: Pathak, S., & Muralidharan, E. (2018). Economic Inequality and Social Entrepreneurship. Business & Society, 57(6), 1150–1190.
This article explores the extent to which income inequality and income mobility—both considered indicators of economic inequality and conditions of formal regulatory institutions (government activism)—facilitate or constrain the emergence of social entrepreneurship. Using 77,983 individual-level responses obtained from the Global Entrepreneurship Monitor (GEM) survey of 26 countries, and supplementing with country-level data obtained from the Global Competitiveness Report of the World Economic Forum, our results from multilevel analyses demonstrate that country-level income inequality increases the likelihood of individual-level engagement in social entrepreneurship, while income mobility decreases this likelihood. Further, income mobility negatively moderates the influence of income inequality on social entrepreneurship, such that the condition of low income mobility and high income inequality is a stronger predictor of social entrepreneurship. We discuss implications and limitations of our study, and we suggest avenues for future research.
Visit the journal website to see access options for this document.
Recommendations from this resource
1) Data from more countries would allow more generalized findings. Further, a larger number of developed and developing countries would allow more generalization in our supplementary analysis of the comparison between developed and developing countries.
2) Our study considers only income mobility. Future research may consider complementing the results from the present study with the effects of mobility in class and status to further understand the likelihood of social entrepreneurship.
3) Future research may examine the longitudinal effects of the relationship between mobility and income inequality on the likelihood of social entrepreneurship. In other words, longitudinal studies could examine the question of whether reducing inequality as a consequence of improved mobility would reduce opportunities for social entrepreneurs in the long run.
4) Future research may therefore examine the longitudinal effects of the relationship between mobility and income inequality on the likelihood of social entrepreneurship.
In other words, longitudinal studies could examine the question of whether reducing inequality as a consequence of improved mobility would reduce opportunities for social entrepreneurs in the long run.
5) Political structure (e.g., decentralized democratic vs. centralized structure) or the role of the state may also moderate the influence of economic inequality (Lee & Bankston, 1999). Future research may examine the effect of political structures on conditions of economic inequality that influence the likelihood of social entrepreneurship.
6) Supplementary results also suggest a detailed comparison with the likelihood of commercial entrepreneurship. A comparative longitudinal study in this regard may help to tease out the underlying mechanisms and boundary conditions that drive the relationship between economic inequality and both forms of entrepreneurial activity.