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Social entrepreneurship has been recognized as a helpful instrument of social and economic policy, particularly when dealing with unemployment and social problems (Alvord, Brown & Letts, 2004; Borzaga & Galera, 2012; Lambru, 2012; Parente, Barbosa & Vilhena, 2012a; Quintão, 2004; Raimi & Ajiboshin, 2018). Also, social organizations have a key role in solving or attenuating social problems by taking risks and developing new approaches to do things differently (Raimi & Ajiboshin, 2018). If social entrepreneurs are successful, they will induce regional productivity, employment growth, regional economic development, as well as sustainable development (Acs, 2010; Karlsson, Johansson & Stough 2010; Mitra, 2012).
The European Commission (EU) recognized the importance of social organizations for the development of societies endowed with higher levels of democracy, activism and social cohesion (European Communities, 2011). Similarly, Yiu, Wan, Ng, Chen, and Su (2014) argue that social entrepreneurship plays an important role in the community development of emerging economies, and Nega and Schneider (2014) highlight the significant role of social entrepreneurship in economic development.
For McAnany (2012), social entrepreneurship has a great potential to contribute to: (i) social change; (ii) the development of local communities; (iii) the enhancement of economic growth; (iv) poverty reduction; and (v) environmental sustainability.
Entrepreneurship as a social construction is inevitably influenced by the institutional environment, which comprises all the external influences that can be classified as economic, technological, demographic, social, cultural, and governmental/institutional (David, 2011; Hill & Jones, 2013). The institutional environment affects the entrepreneur’s behavior and performance (Covin & Slevin, 1991; Cajaiba-Santana, 2010; Mair, 2010; Welter, 2011; Urban & Kojinga, 2017; Chandna, 2017). Likewise, as social ventures are not developed in a vacuum (CASE, 2008) they are constrained by a particular environment (Weerawardena & Mort, 2006). As stated by Katz and Kahn (1966) in the Open System Theory, the emergence of organizations (mainly private companies) derives from the interaction between agents and environment, which suggest a strong influence of the environment on the creation of organizations. The same applies to social entrepreneurship, as the environmental forces could incite or deter the launching of new social ventures (Mair, 2010; Urbano & Ferri, 2011; Ziegler, 2009).
Social entrepreneurs also need to keep different types of networks (personal, entrepreneurial, institutional) for resource acquisition and the management of the assets of the social organization in order to accomplish their social mission. The literature on social entrepreneurship has recognized that networks are critical for social organizations’ success (Austin, Stevenson & Wei-Skillern, 2006; Bauer, Guzmán & Santos 2012; Leadbeater, 1997; Mair & Martí, 2006; Sakurai, 2008; Sharir & Lerner, 2006). According to Chell (2007), the analysis of the social entrepreneur’s behavior would not be complete without the inclusion of the role of networks. Leadbeater (1997) also claims that networks represent one of the main assets of social organizations.