Assessing the Non-financial Outcomes of Social Enterprises in Luxembourg

Abstract

By addressing social issues, rather than maximizing profits, social enterprises are said to contribute to the well-being of societies. In this paper, we test whether social enterprises fulfil this expectation. The paper applies regression analysis to a unique dataset obtained by merging survey data from the Global Entrepreneurship Monitor with official statistics on social enterprises in Luxembourg. Results suggest that social enterprises contribute to subjective well-being, which is an encompassing measure of people’s satisfaction with their own life. We find that when the share of social enterprises in a city increases, the ill-being of poor and unemployed people declines. Therefore, policy makers who seek to increase the well-being of economically disadvantaged people could adopt policies to promote the creation of social enterprises.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8

Notes

  1. 1.

    As suggested by the name, this ministry takes care of activities within solidarity economy as well, which may be intended as a subset of the social economy. Activities within the solidarity economy pursue social goals with the purpose of questioning and transforming the society, as well as by reducing social injustices (Utting et al. 2014). For instance, while an amateur soccer club is part of the social economy, an amateur soccer club for refugees is part of the solidarity economy (e.g. the Italian team Liberi Nantes, which is composed of African refugees). In this paper, we focus on social enterprises within the more general social economy.

  2. 2.

    Possible legal forms are cooperative, non-profit organization, charitable organization, fraternal benefit organization, mutual insurance association, cultural association and sports association.

  3. 3.

    Possible overlapping social enterprises are considered only once.

  4. 4.

    The authors are thankful to an anonymous reviewer for raising this point.

References

  1. Alesina, A., Di Tella, R., & MacCulloch, R. (2004). Inequality and happiness: Are Europeans and Americans different? Journal of Public Economics, 88(9), 2009–2042.

    Google Scholar 

  2. Allegrezza, S., & Molling, V. (2005). À la recherche de l’économie sociale et solidaire, le cas du Grand-Duché de Luxembourg. STATEC Working papers.

  3. Amin, A. (2009). Extraordinarily ordinary: Working in the social economy. Social Enterprise Journal, 5(1), 30–49.

    Google Scholar 

  4. Becchetti, L., & Borzaga, C. (2010). The economics of social responsibility: The world of social enterprises. London: Routledge.

    Google Scholar 

  5. Blakemore, K. (2003). Social policy: An introduction (2nd ed.). New York: Open University Press.

    Google Scholar 

  6. Blanchflower, D., & Oswald, A. (2004). Money, sex and happiness: An empirical study. The Scandinavian Journal of Economics, 106(3), 393–415.

    Google Scholar 

  7. Borzaga, C., Depedri, S., & Tortia, E. (2010). The growth of organizational variety in market economies: The case of social enterprises. Euricse Working Papers, N.003| 10.

  8. Bouchard, M. J., Ferraton, C., Michaud, V., & Leclerc, P. (2006). Database on social economy organizations: The qualification criteria. Chaire de recherche du Canada en économie sociale: Université du Québec à Montréal.

  9. Bruni, L., & Porta, P. (2007). Handbook on the Economics of Happiness. Cheltenham and Northampton, MA: Edward Elgar Publishing Ltd.

    Google Scholar 

  10. Calkins, P., & Ngo, A.-T. (2010). The impacts of farmer cooperatives on the well-being of cocoa producing villages in Cote d’Ivoire and Ghana. Canadian Journal of Development Studies/Revue canadienne d’études du développement, 30(3–4), 535–563.

    Google Scholar 

  11. Calò, F., Teasdale, S., Donaldson, C., Roy, M. J., & Baglioni, S. (2017). Collaborator or competitor: assessing the evidence supporting the role of social enterprise in health and social care. Public Management Review, 3, 1–25.

    Google Scholar 

  12. Cameron, J. (2010). Business as usual or economic innovation? Work, markets and growth in community and social enterprises. Third Sector Review, 16(2), 93–108.

    Google Scholar 

  13. Clark, A. E., D’Ambrosio, C., & Ghislandi, S. (2013). Poverty and well-being: Panel evidence from Germany. PSE Working Papers hal-00814659, HAL.

  14. Clark, A. E., Flèche, S., & Senik, C. (2012). The great happiness moderation. SOEP papers on Multidisciplinary Panel Data Research 468, DIW Berlin, The German Socio-Economic Panel (SOEP).

  15. Conference, European Standing, & of Co-operatives, Mutual Societies, Associations and Foundations (2002). Social Economy Charter. Bruxelles: CEP-CMAF.

  16. Defourny, J., & Nyssens, M. (2008). Social enterprise in Europe: Recent trends and developments. Social Enterprise Journal, 4(3), 202–228.

    Google Scholar 

  17. Defourny, J. (2009). Concepts and realities of social enterprise: a European perspective. Collegium, (Spring):73–98.

  18. Defourny, J., & Nyssens, M. (2010). Social enterprise in Europe: At the crossroads of market, public policies and third sector. Policy and Society, 29(3), 231–242.

    Google Scholar 

  19. Defourny, J., & Nyssens, M. (2012). The EMES Approach of Social Enterprise in a Comparative Perspective. EMES European Research Network.

  20. Defourny, J., & Nyssens, M. (2013). Social coops: When social enterprises meet the cooperative tradition. Journal of Entrepreneurial and Organizational Diversity, 2(2), 11–33.

    Google Scholar 

  21. Di Tella, R., & MacCulloch, R. (2008). Gross national happiness as an answer to the Easterlin paradox? Journal of Development Economics, 86(1), 22–42.

    Google Scholar 

  22. Diener, E., Emmons, R.-A., Larsen, R. J., & Griffin, S. (1985). The satisfaction with life scale. Journal of Personality Assessment, 49(1), 71–75.

    Google Scholar 

  23. Diener, E., Inglehart, R., & Tay, L. (2012). Theory and validity of life satisfaction scales. Social Indicators Research, 112(3), 497–527.

    Google Scholar 

  24. Diener, E., Lucas, R., Schimmack, U., & Helliwell, J. (2009). Well-being for public policy. New York: Oxford University Press.

    Google Scholar 

  25. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology, 29(1), 94–122.

    Google Scholar 

  26. European Commission. (2013). Social economy and social entrepreneurship. Social Europe guide (Vol. 4). Brussels: European Commission.

    Google Scholar 

  27. Farmer, J., De Cotta, T., McKinnon, K., Barraket, J., Munoz, S.-A., Douglas, H., et al. (2016). Social enterprise and wellbeing in community life. Social Enterprise Journal, 12(2), 235–254.

    Google Scholar 

  28. Fazzi, L. (2010). The provision of welfare and general-interest services. In L. Becchetti & C. Borzaga (Eds.), The economics of social responsibility. The world of social enterprises (pp. 55–71). London: Routledge.

    Google Scholar 

  29. Fitoussi, J.-P., & Stiglitz, J. (2011). On the measurement of social progress and well being: some further thoughts. Documents de Travail de l’OFCE, No.2011-19.

  30. Fowler, E., Coffey, B., & Dixon-Fowler, H. (2017). Transforming good intentions into social impact: A case on the creation and evolution of a social enterprise. Journal of Business Ethics. https://doi.org/10.1007/s10551-017-3754-5.

  31. Frey, B., & Stutzer, A. (2000). Happiness, economy, and institution. Economic Journal, 110(466), 918–938.

    Google Scholar 

  32. Fulton, M. E., & Ketilson, L. H. (1992). The role of cooperatives in communities: Examples from Saskatchewan. Journal of Agricultural Cooperation, 7, 15–42.

    Google Scholar 

  33. Hayo, B. (2007). Happiness in transition: An empirical study on Eastern Europe. Economic Systems, 31(2), 204–221.

    Google Scholar 

  34. Hervieux, C., & Voltan, A. (2016). Framing social problems in social entrepreneurship. Journal of Business Ethics, 151(2), 279–293.

    Google Scholar 

  35. Jackson, K. T. (2016). Economy of mutuality: Merging financial and social sustainability. Journal of Business Ethics, 133(3), 499–517.

    Google Scholar 

  36. Kahneman, D., & Krueger, A. (2006). Developments in the measurement of subjective well-being. The Journal of Economic Perspectives, 20, 3–24.

    Google Scholar 

  37. Laville, J. (2010). L’ économie solidaire: Une perspective internationale. Paris: Libraire Arthème Fayard.

    Google Scholar 

  38. Laville, J.-L., & Nyssens, M. (2001). The social enterprise: Towards a theoretical socio-economic approach. The emergence of social enterprise (pp. 312–333). London: Routledge.

    Google Scholar 

  39. Layard, R. (2005). Happiness: Lessons from a new science. New York: Penguin.

    Google Scholar 

  40. Layard, R. (2009). Why subjective well-being should be the measure of progress. Knowledge and policy charting progress, building visions, improving life: OECD Forum on Statistics.

  41. Lewbel, A. (2012). Using heteroscedasticity to identify and estimate mismeasured and endogenous regressor models. Journal of Business & Economic Statistics, 30(1), 67–80.

    Google Scholar 

  42. Luke, D. A. (2004). Multilevel modeling: Quantitative applications in the social sciences. London: A Sage University Paper Series.

    Google Scholar 

  43. Macaulay, B., Mazzei, M., Roy, M. J., Teasdale, S., & Donaldson, C. (2018). Differentiating the effect of social enterprise activities on health. Social Science & Medicine, 200, 211–217.

    Google Scholar 

  44. Macaulay, B., Roy, M. J., Donaldson, C., & Teasdale, S. (2018). Conceptualizing the health and well-being impacts of social enterprise: A UK-based study. Health Promotion International, 33(5), 748–759.

    Google Scholar 

  45. Muñoz, S.-A., Farmer, J., Winterton, R., & Barraket, J. (2015). The social enterprise as a space of wellbeing: An exploratory case study. Social Enterprise Journal, 11(3), 281–302.

    Google Scholar 

  46. OECD. (2013). OECD guidelines on measuring subjective well-being. Paris: OECD Publishing.

    Google Scholar 

  47. Peiffer, J., & Hiltgen, M. (2010). Vers de nouvelles perspectives pour l’Economie Solidaire au Luxembourg ?, A la recherche de l’économie solidaire et sociale au Luxembourg. Quelques chiffres préliminaires. Conference CRP Henri Tudor.

  48. Pèrotin, V. (2013). Worker cooperatives: Good, sustainable jobs in the community. Journal of Entrepreneurial and Organizational Diversity, 2(2), 34–47.

    Google Scholar 

  49. Powdthavee, N. (2007). Economics of happiness: A review of literature and applications. Chulalongkorn Journal of Economics, 19(1), 51–73.

    Google Scholar 

  50. Powdthavee, N. (2010). The happiness equation: The surprising economics of our most valuable asset. London: Icon Books.

    Google Scholar 

  51. Raudenbush, S. W., & Bryk, A. S. (2002). Hierarchical linear models: Applications and data analysis methods. Thousand Oaks: Sage.

    Google Scholar 

  52. Rosenblatt, C. (2013). Quelle place pour l’économie sociale en Europe? Think Tank européen pour la solidarité.

  53. Roy, M. J., Lysaght, R., & Krupa, T. M. (2017). Action on the social determinants of health through social enterprise. Canadian Medical Association Journal (Journal de l’Association Medicale Canadienne), 189, E440–E441.

    Google Scholar 

  54. Roy, M. J., & Hackett, M. T. (2017). Polanyi’s ‘substantive approach’ to the economy in action? Conceptualising social enterprise as a public health ‘intervention’. Review of Social Economy, 75(2), 89–111.

    Google Scholar 

  55. Roy, M. J., Donaldson, C., Baker, R., & Kerr, S. (2014). The potential of social enterprise to enhance health and well-being: A model and systematic review. Social Science & Medicine, 123, 182–193.

    Google Scholar 

  56. Roy, M. J., Donaldson, C., Baker, R., & Kay, A. (2013). Social enterprise: New pathways to health and well-being? Journal of Public Health Policy, 34(1), 55–68.

    Google Scholar 

  57. Rückert, E., & Sarracino, F. (2014). Assessing the social and solidarity economy in Luxembourg. STATEC Working papers.

  58. Sabatini, F., Modena, F., & Tortia, E. (2014). Do cooperative enterprises create social trust? Small Business Economics, 42(3), 621–641.

    Google Scholar 

  59. Savio, M., & Righetti, A. (1993). Cooperatives as a social enterprise in Italy: A place for social integration and rehabilitation. Acta Psychiatrica Scandinavica, 88(4), 238–242.

    Google Scholar 

  60. Schimmack, U., Krause, P., Wagner, G., & Schupp, J. (2010). Stability and change of well-being: An experimentally enhanced latent state-trait-error analysis. Social Indicators Research, 95(1), 19–31.

    Google Scholar 

  61. Schneider, L., & Schimmack, U. (2009). Self-informant agreement in well-being ratings: A meta-analysis. Social Indicators Research, 94(3), 363–376.

    Google Scholar 

  62. Schwarz, N., & Strack, F. (1999). Reports of subjective well-being: Judgmental processes and their methodological implications. In D. Kahneman & N. Schwarz (Eds.), Well-being: The foundations of hedonist psychology. New York: Russell Sage Foundation.

    Google Scholar 

  63. Snijders, T. A. (2005). Power and sample size in multilevel linear models. In B. Everitt & D. Howell (Eds.), Encyclopedia of statistics in behavioral science (Vol. 3, pp. 1570–1573). New York: Wiley.

    Google Scholar 

  64. Stutzer, A., & Frey, B. S. (2012). Recent developments in the economics of happiness: A selective overview. Bonn: Institute for the Study of Labor (IZA).

    Google Scholar 

  65. Tencati, A., & Zsolnai, L. (2009). The collaborative enterprise. Journal of Business Ethics, 85(3), 367–376.

    Google Scholar 

  66. Toia rReport. (2013). Committee on Industry. European Parliament: Research and Energy.

  67. Tortia, E. (2010). The impact of social enterprises on output, employment, and welfare. In L. Becchetti & C. Borzaga (Eds.), The economics of social responsibility. The world of social enterprises. London: Routledge.

    Google Scholar 

  68. Utting, P., van Dijk, N., & Matheï, A.-M. (2014). Social and Solidarity Economy Is There a New Economy in the Making?. UNRISD Occasional Paper: Potential and Limits of Social and Solidarity Economy.

  69. van Praag, B., Frijters, P., & Ferrer-i Carbonell, A. (2003). The anatomy of subjective well-being. Journal of Economic Behaviour and Organization, 51(1), 29–49.

    Google Scholar 

  70. van Reekum, C., Urry, H., Johnstone, T., Thurow, M., Frye, C., Jackson, C., et al. (2007). Individual differences in amygdala and ventromedial prefrontal cortex activity are associated with evaluation speed and psychological well-being. Journal of Cognitive Neuroscience, 19(2), 237–248.

    Google Scholar 

  71. Wanous, J., & Hudy, M. (2001). Single-item reliability: A replication and extension. Organizational Research Methods, 4, 361–375.

    Google Scholar 

Download references

Acknowledgements

The authors wish to thank Andréa Gosset for her precious contribution on an earlier version of this work, and acknowledge the financial support of the Observatoire de la Compétitivité, Ministère de l’Economie, DG Compétitivité. F. Sarracino: Russia (LCSR Russian Government Grant #11.G34.31.0024 from November 28, 2010).

Author information

Affiliations

Authors

Corresponding author

Correspondence to Francesco Sarracino.

Ethics declarations

Ethical Approval

This article does not contain any studies with human participants performed by any of the authors.

Appendix

Appendix

See Tables 8, 9, 10, 11, 12 and 13.

Table 8 Marginal effects for each category of the life satisfaction variable
Table 9 Estimates of the non-financial outcomes of social enterprises using random intercept model with three levels
Table 10 Marginal effect on well-being including the share of social enterprises in 2011
Table 11 Association between the share of social enterprises and the proxy ‘my life is close to my ideal’ (complete table)
Table 12 Association between the share of social enterprises and the proxy ‘the conditions of my life are excellent’ (complete table)
Table 13 Association between the share of people employed in social enterprises and life satisfaction (complete table)

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Sarracino, F., Fumarco, L. Assessing the Non-financial Outcomes of Social Enterprises in Luxembourg. J Bus Ethics 165, 425–451 (2020). https://doi.org/10.1007/s10551-018-4086-9

Download citation

Keywords

  • Social enterprises
  • Subjective well-being
  • Non-economic outcomes