Social Entrepreneurship and Regional Economic Development

Abstract

This study explored the relationships between social entrepreneurship and regional economic development by using data on government-driven social enterprises in South Korea. The following summarizes the empirical results from fixed-effect and random-effect regression models which simultaneously control for factors that are theorized to affect regional economic development. First, the regional GDP per capita was shown to increase as the number of regional certified social enterprises increased, indicating that a growth in the number of social enterprises contributes positively to regional economic development. Second, this study also found that regional economic development variables such as physical capital,human capital, knowledge capital, and entrepreneurship contribute to regional economic development, supporting arguments made by previous studies based on neoclassical economic growth theories, endogenous growth theories, human capital theories, and entrepreneurship theories. Third, the results suggest a new direction for policy that focuses on instruments to promote social entrepreneurship in region. The results of this study also imply that local governments should put forth an effort to implement policies to promote sustainable regional economic development and growth by actively fostering social enterprises in their region. Because local government possess the ability to efficiently respond to the immediat