Theory and Empirical Research in Social Entrepreneurship

Theory and Empirical Research in Social Entrepreneurship

The Johns Hopkins University series on Entrepreneurship

Edited by Phillip H. Phan, Jill Kickul, Sophie Bacq and Mattias Nordqvist

Scholars and policy makers have long recognized entrepreneurship as a powerful engine of economic growth. There is clear evidence, however, that when it comes to social entrepreneurship, policy attention has not been matched by growth in scholarly research. This volume illustrates the type of empirical effort that must take place for the field to advance.

Chapter 2: A social exchange theory of non-governmental organizations as social entrepreneurs in rural entrepreneurship

Soo-Hoon Lee

Subjects: business and management, entrepreneurship, social entrepreneurship

Extract

Those who study the development of societies have considered entrepreneurial capital accumulation as the engine that drives economic growth (Van Stel et al., 2005). Evidence from the Global Entrepreneurship Monitor (GEM) shows that growth in gross domestic product (GDP) and the employment rate of a country increase with more venture startups (Zacharakis et al., 1999). Entrepreneurs are important economic engines of any country's growth because they not only accelerate the generation, application, and spread of innovative ideas but also ensure the efficient use of resources and expand the boundaries of a country's economic activities (Reynolds et al., 1999). Interest in rural entrepreneurship in developed countries has increased in recent years because traditional economic activity in manufacturing has struggled to remain competitive in the face of increased global competition (Marke and Markley, 2006). In rural areas hardest hit by economic stagnation, entrepreneurship is a solution to reignite economic development (Ozgen and Minsky, 2007). Policymakers thus look to rural entrepreneurship as a solution to difficulties encountered in regional wealth creation. In developing countries, economic development has traditionally been a top-down process in which aid money filters through a bureaucratic chain before reaching its beneficiaries. Without the inclusion of training and capacity building, such passive beneficiaries often become dependent on continuing government programs to fund consumption (Maxwell, 2003).

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