A Structural Hole in Social Enterprise Networks: Are You Our Friend or Stranger?

Abstract

This study proposes that social enterprise networks are closed networks based on clan economy and strong identities shaped by the unique challenges of low economic viability and external scrutiny for their dual missions. As such, within the networks, structural hole spanners who actively interact with various actors can be treated as a stranger by within-network members, and thus benefit less from the networks. With 363 observations of social enterprises in Korea collected between 2021 and 2022, we found that the structural hole position in social enterprise networks made it more difficult to obtain capitals from external sources. In addition, we also found that, beyond a certain threshold, the greater the external resources obtained, the poorer the financial performance of the social enterprises. This study is meaningful in challenging the common assumptions of the social network literature in the context of social enterprises.