It’s Time for Impact: An Analysis of the Prosocial Signals in Social Enterprises

This paper investigates the likelihood and timing of social enterprises’ (SEs) adoption of prosocial signals, such as certifications or specific legal statuses. We framed prosocial signals into governance- and market-oriented, indicating internal prosocial practices and processes, and communicating externally prosocial efforts, respectively. We test and confirm the hypothesis that the prior adoption of governance-oriented signals increases the likelihood and speed of a SE embracing market-oriented signals. The maturity (e.g. age of the firm) and the managerialization (e.g. number of managers) of SEs positively moderates this relationship. To conduct this study, we hand collected data from 184 Italian SEs, of which 56 took the legal status of Benefit Corporation and the B Corp certification, representing governance- and market-oriented signals, respectively, and 128 that did not. This work provides academics and practitioners implications on the sequence and complementarity of prosocial signals.