Are Social Enterprises Efficient? A Theoretical Approach1. Issue 4 (7th October 2018)

• Record Type: Journal Article
• Authors: Beckmann, Tobias
• Is Part Of: Economic papers. Volume 37:Issue 4(2018:Dec.)
• Page Start: 374
• Page End: 389
• Publication Date: 2018-10-07
• Subjects: Social enterprise -- industrial organisation -- microeconomic analysis; Economics -- Periodicals; Australia -- Economic conditions -- Periodicals; 330.05
• DOI: 10.1111/1759-3441.12232
• Languages: English
• ISSNs: 0812-0439

Abstract

Abstract : Social enterprises are increasingly being used to distribute income to disadvantaged groups. However, a lack of consensus of what a social enterprise is has prevented researchers from assessing their relative allocative efficiency. I address this gap by extending the standard microeconomic model of a profit‐maximising firm to consider social enterprises as a Social Corporation (SC). I then analyse four types of SC, showing that three can be as allocatively efficient as a for‐profit firm in equilibrium, despite inputs not necessarily being paid their marginal benefit.