Abstract:*

Social enterprises play a key role in addressing societal challenges through commercial activity, yet their dependence on broad, heterogeneous stakeholder support can make them especially fragile when external conditions shift. Prior work shows that external shocks can threaten these hybrid organizations or, at times, strengthen them by mobilizing support. This tension motivates a core question: under what conditions does the same shock reduce resilience for some social enterprises while enhancing it for others? We examine political polarization as an increasingly important external shock and theorize a conditional, double-edged effect. We argue that polarization raises dissolution risk nationally by increasing uncertainty around mission support. Yet polarization can also be associated with greater persistence in highly polarized communities, where local needs become more salient and organizational commitment becomes anchored in place-based relationships. Using the Brexit referendum as a natural experiment and longitudinal data on UK Community Interest Companies, we find that polarization increases dissolution overall but is associated with lower dissolution in highly polarized communities despite reduced profits. Our results extend research on social enterprises and reveal how political polarization can generate both fragility and localized resilience rooted in community-anchored commitment.

*Co-authored with M. Gera (EUR) and S. Malik (ABS, UvA)

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This will be a hybrid seminar. If you are interested in joining this seminar, please send an email to the secretariat of ASF at asf-feb@uva.nl.