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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 52, No. 2, pp.339-364
ISSN: 1226-1874 (Print)
Print publication date 30 Apr 2023
Received 28 Aug 2022 Revised 16 Dec 2022 Accepted 26 Dec 2022
DOI: https://doi.org/10.17287/kmr.2023.52.2.339

외부 보조금이 사회적 기업의 자립에 미치는 영향: 기업 성향에 따른 차이를 중심으로

Sohee Park
(First Author) Seoul National University psh9263@snu.ac.kr
The Effect of Outside Subsidy on Social Enterprises’ Financial Sustainability and the Role of Management Style


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

As social enterprises are regarded as key players in solving social issues, they have opportunities to receive various financial supports from external sources to acquire operating capital and establish foundations for growth. However, there is growing concern that dependence on outside support may discourage them from building the basis for self-sufficiency, potentially leading to business closure once the support ceases. In this study, I examine how outside subsidies affect social enterprises’ ability to generate operating income, and how this relationship differs across enterprises' management styles. Using data from the Center for Social Value Enhancement Studies, I find evidence that, while outside subsidies generally have a negative effect on social enterprises’ future performance, this effect is mitigated for enterprises that are market-oriented, entrepreneurial, and independent.

Keywords:

social enterprise, outside subsidy, sustainability

Acknowledgments

I would like to thank the Center for Social value Enhancement Studies for providing data for the empirical analysis.

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∙ The author Sohee Park is a doctoral student at the business school of Seoul National University. She earned her bachelor's and master's degrees from the same university. After graduating from the undergraduate program, she worked as a junior economist in the Financial Stability Department of the Bank of Korea, and later worked as a project manager at an IT startup. She is majoring in accounting in graduate school and is conducting research on topics related to the incentive structure and dynamics among key participants in the capital market.