ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

The Effect of Social Performance Incentives on the Next Management Performance of Social Enterprises1

  • Kyoungok Yun Soongsil University
  • Jaeseong Son Ongji Tax University
  • Hoi Yoon Soongsil University
  • Hee Chun Roh Soongsil University

Asian Tax Journal Vol. 23 No. 5 (2022), pp. 209-233

Abstract

This study investigates the effect of social performance incentive programs on social enterprises regarding the sustainability of social enterprises. Specifically, it is examined whether the sustainability of the management performance of social enterprises is affected by compensation with social performance incentives by measuring the social performance of social enterprises in terms of monetary value. Our empirical analysis was conducted on 1,045 social enterprises from 2015 to 2020 utilizing data from Center for Social value Enhancement Studies (CSES). The results are as follows： First, social performance incentives for social enterprises for the current period increase the management performance in the following period. The results are interpreted in a manner that the next management performance has increased due to the motivation to achieve higher social performance in the next period for social performance incentives, and the social performance incentives are showing effect as intended. Second, among the types of social performance, social performance incentives due to current employment performance and social ecosystem performance are positively associated with management performance in the upcoming year. An increase in employment of the vulnerable in social enterprises enhances the next management performance, and the social ecosystem performance such as support for start－ups and transactions with vulnerable producers increased sales. Lastly, social performance incentives due to current social service performance show a negative relationship with management performance in the next period. In other words, product discounts and services specialized for the vulnerable social group has resulted in a decrease in management performance. In conclusion, these findings provide that the social performance incentives of social enterprises have a positive effect on improving the subsequent management performance, contributing to achieving social goals, and serving as the basis of the sustainable growth for social enterprises.

Keywords

  • social enterprise
  • social value
  • social performance incentives
  • social performance
  • social service

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