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Small Business Economics

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01.04.2012

Drivers of non-profit activity: a cross-country analysis

verfasst von: Edward Nissan, Maria-Soledad Castaño, Inmaculada Carrasco

Erschienen in: Small Business Economics | Ausgabe 3/2012

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Abstract

This paper contributes to the existing debate on the determinants of non-profit activity. The main theories have been centered in (1) the study of the individual behavior of people (donors, non-profit entrepreneurs), (2) one single factor or (3) one single country. To quantify this approach, data for 38 countries have been used, extracted from World Values Survey, United Nations Development Program and Global Entrepreneurship Monitor. A structural modeling approach based in partial least squares (PLS) has been applied. The results provide evidence of the strength of environmental factors such as trust, economic development and social care public expenditures in non-profit activity. The model doesn’t confirm the existence of a positive relationship between entrepreneurship and non-profit activity. Nevertheless, the authors consider that the supply side theories and the idea of spatial production of entrepreneurship are quite consistent and find some signs evidencing a positive relationship between these variables.

Vorheriger Artikel The capital gap for small technology companies: public venture capital to the rescue?

Nächster Artikel Long-term care, dependence and the third sector

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While in Anglo-Saxon countries it is usual to employ a narrow definition of Third Sector, the Mediterranean and Latin-American countries employ a broader concept that includes even cooperatives.

We would like to note the difference between for-profit and for-benefit. The first one is related to organizations driven by earned income and maximization of owners’ benefit behavior, while the second refers to organizations devoted to maximizing social benefit; even if the non-distribution constraint has been relaxed, they dedicate profits to its social mission prosecution.

Koning et al. (2007, pp. 255–256) state that the market failures that are most prevalent in explaining the rationale of non-profit organizations are: asymmetric information, externalities, market power and distributional or merit good concerns.

This government failure is also a market failure: for-profits don’t supply public goods due to the free-rider behavior.

Nevertheless, Koning et al. (2007) didn’t find empirical evidence to confirm that quality in services (in health and children’s care) offered by non-profits is greater than that offered by for profits. They also remark that profits and subsidies are not employed by non-profits to ameliorate quality but to raise wages, create inefficiencies, or crowd out private donations or donated labor.

But they find no empirical support for either this hypothesis or the alternative hypothesis.

We must remember that post-materialist values increment trust (in oneself and in others). See more about post-materialism in Inglehart’s literature.

Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Italy, Japan, Latvia, Malaysia, Mexico, The Netherlands, Peru, Philippines, Russian Federation, Singapore, Slovenia, South Africa, Spain, Sweden, Thailand, Turkey, the United Kingdom and United States.

In this sense, Jeavons (1992, p. 403) says that non-profits exist to “give expression to the social, philosophical, moral or religious values of their founders and supporters.”

For a study of different types of measurement of social capital and their difficulties, see Carrasco and Castaño (2009).

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Titel: Drivers of non-profit activity: a cross-country analysis
verfasst von: Edward Nissan
Maria-Soledad Castaño
Inmaculada Carrasco
Publikationsdatum: 01.04.2012
Verlag: Springer US
Erschienen in: Small Business Economics / Ausgabe 3/2012
Print ISSN: 0921-898X
Elektronische ISSN: 1573-0913
DOI: https://doi.org/10.1007/s11187-010-9276-5

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