Association for Public Policy Analysis & Management

The work of social enterprises to address complex social problems is expected to have a positive impact as well as have a spillover effects in terms of the “entrepreneurial” private sector (Estrin, Mickiewicz, & Stephan, 2013). Intermediary organizations for social enterprises, including incubators, venture philanthropists, capacity building organizations, and accreditation organizations play an important supporting role for social enterprise organizations. However, there is a gap in understanding how social enterprise intermediaries mediate the influence of surrounding public and private institutions on social enterprises (Kerlin, 2017) to help legitimize and institutionalize these institutional innovations. This comparative study examines social enterprise intermediaries and organizations in the emerging economies of China and India to better understand how different contexts shape the legitimization work of intermediaries in countries where the need for additional social resources is high. The findings offer insights for policymakers to understand how the entrance of social enterprises as new institutional actors in these settings can be eased.

Intermediary organizations support the growth of social enterprises in both China and India where social enterprises have at times been overlooked or viewed with skepticism. Using an institutional logics and social constructivism approach, we look at how legitimating strategies and factors can sometimes be isomorphic in nature and can work both in the direction of the legitimation of institutional innovation and against it (Kerlin, Peng, & Cui, 2017). Thus we propose that one of the core tenets of institutionalism, that “isomorphism legitimates” (Raffaelli & Glynn, 2015:10), remains at the heart of how new organizations such as social enterprises are institutionalized in a new environment.

This study conducts a comparative analysis of how social enterprise intermediaries in China and India mediate the influence of macro institutions to legitimize and institutionalize social enterprises as institutional innovations. Macro institutions include government policy, business, civil society, and culture from both a regulatory and institutional logics perspective. Data for this study comes from surveys of intermediary-trained social enterprises, reviews of intermediary websites from each country, and other sources of publicly accessible information. We conduct content analysis to identify the roles and functions of intermediaries in relation to social enterprises and institutions in each country, and then compare them across the countries.

Our preliminary findings show similarities and differences in China and India. We find that the influence of intermediaries spans across the emergence, growth and development of social enterprises in both countries and that intermediaries define the concept of social enterprise through discourse and diffusion, induce and regulate social enterprises through funding and certification, and encourage legitimacy. Differences include that in China social enterprise intermediaries focus more on rationalization and philanthropic venture investment while in India, their focus is on empowerment and professionalization due to the prevalent adoption of impact assessment measures, use of formal training and mentoring practices, and provision of financial capital.

This study is of interest to policymakers and international development actors, drawing attention to the role of intermediaries in influencing the discourse, institutionalization, and future direction of social enterprise in a country.