The effect of collaborative governance in social startups on social performance: The mediating effect of economic performance

Abstract

Our paper empirically confirms that collaborative governance in social startups affects social performance through mediating economic performance. While there is a growing literature on the sustainable growth and performance of social economy organizations, empirical research on social startups is very scarce. Therefore, this study can contribute to the knowledge of social economy and entrepreneurship research through an empirical study that identifies factors for social startups' performance. This study utilized data from 399 social startups that are commercial companies such as corporations, which are the legal form of startups in South Korea, and the results of the analysis are as follows. First, cooperative governance of social startups had a significant positive effect on economic performance, and social performance also had a significant positive effect. Second, the economic performance of social startups had a significant positive impact on social performance. Finally, collaborative governance in social startups affected social performance through the mediation effect of economic performance. The implications and insights of this study are as follows: First, we find that collaborative governance has a positive impact on both economic and social performance of social startups, and thus is a key factor in the success of social startups. Second, this study represents the first empirical study on the performance improvement of social startups and suggests collaborative governance as an important success factor for social startups.