Social enterprises’ objectives and choices of legal forms under the framework of Sustainable Development Goals – an analysis of 80 cases in Zhejiang Province, China

What is it about?

This study is the first quantitative analysis to identify factors that associate with social enterprises (SEs)’ choice of legal forms in China. The sample includes 80 participants of Social Entrepreneurs Stars Competition in Zhejiang Province of China. The findings confirm the theoretical discussions that SEs’ choices of legal forms reflect SEs’ strategies towards achieving social objectives. Similar to certain countries, some SEs in China register as nonprofit entities to concentrate on nonprofitable sustainability objectives, while others register as commercial enterprises or hybrid organizations to generate profits. However, some SEs focus on profitable non-sustainability issues and fail to prioritize social objectives over economic objectives. There are positive effects of social entrepreneurs’ background similarity and negative effects of social entrepreneurs’ educational level on their SEs’ choices to register as commercial enterprises. To encourage more societal resources being allocated towards achieving the United Nations’ Sustainable Development Goals, policymakers and SE certification programs are recommended to explicitly incorporate sustainability objectives into the evaluation standards and supportive policies for SEs. Social entrepreneurs who aim to balance the social and economic objectives in their business are suggested to target the population with whom they share similar community background. Training or consulting programs for social entrepreneurs are suggested to provide advice tailored to their socio-economic background and personal experiences.

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