Entrep. Res. J.

2022; 12(4): 501–528

Wenyuan Li, Sikandar Ali Qalati*,

Muhammad Aamir Shafique Khan*, Gyamfi Yeboah Kwabena,
Daria Erusalkina and Farooq Anwar
Value Co-creation and Growth of Social
Enterprises in Developing Countries:
Moderating Role of Environmental Dynamics
https://doi.org/10.1515/erj-2019-0359
Received December 5, 2019; accepted April 8, 2020

Abstract: Based on the value co-creation theory, this study proposed a theoretical
model of the effects of value co-creation on the growth of social enterprises. Primary
data was obtained using field surveys through a close-ended questionnaire from
January to June 2019. The respondents were employees of social enterprises working
in the Punjab province of Pakistan. Partial least squares structural equation
modeling was used for quantitative data analysis and to verify the statistical sig-
nificance of the direct link between value co-creation and social enterprise growth,
and the negative moderating (substituting) effect of environmental dynamics on the
relationship between value co-creation and social enterprise growth.

Keywords: social enterprise, value co-creation, social enterprise growth,

environmental dynamics, Pakistan

1 Introduction
Under the market economy of capitalism, the many restrictions produce inequity
and issues in the redistribution of wealth, excessive consumption, pollution of the
natural environment, constraints of human liberty and dignity, and inefficiency of
over-manufacturing. Some new problems with the reciprocal relationship between
public and private sectors resolved with the help of social enterprises (Nicolás and

*Corresponding authors: Sikandar Ali Qalati, Ph.D. and Muhammad Aamir Shafique Khan,
Jiangsu University, Zhenjiang, 212013, China, E-mail: 5103180243@stmail.ujs.edu.cn (S.A.
Qalati), drkhanju@hotmail.com (Khan MAS). https://orcid.org/0000‐0001‐7235‐6098 (S.A.
Qalati), https://orcid.org/0000‐0002‐7072‐6347 (M.A.S Khan)
Wenyuan Li, Gyamfi Yeboah Kwabena and Daria Erusalkina: Jiangsu University, Zhenjiang, China.
https://orcid.org/0000-0002-2724-1889 (G.Y. Kwabena)
Farooq Anwar: The University of Lahore Lahore Business School, Lahore, Pakistan
502 W. Li et al.

Rubio 2016). Since the beginning of 2004, the “concepts and theory of Social
Enterprise” have become more prevalent in developing countries (Defourny and
Nyssens 2017). Prior work focused on social entrepreneurship provided a limited
understanding of how to produce societal value (Sigala 2019). Social enterprises
(SE), defined as “business that addresses social issues while creating economic
value, plays an important role in solving social problems in contexts in which
social issues are complexly intertwined” (Ge, Xu, and Pellegrini 2019).
The market behavior of social enterprises, including such aspects as their ability
for market development (Yu 2011), creating a sharing economy (Roh 2016), and
sustainable resource utilization (Hynes 2009), are all motivating influences for the
development of SEs. Keeping in view such circumstances, how the conduct of SE
with regard to venture behavior impacts the development of firms became a focus of
more attention. Regardless of this, the existing literature continued to mainly focus
on theoretical investigations, such as the definition of social entrepreneurship en-
terprise (Alegre, Kislenko, and Berbegal-Mirabent 2017), and the classification of
social businesspersons (Murphy and Marvel 2018). Empirical studies emerged
gradually, but more attention was still paid to micro-level, entrepreneurial oppor-
tunities, entrepreneurs, and motivation for entrepreneurial activities (Agbozo et al.
2017). These results created a growing desire for more investigation to obtain a better
understanding of the drivers of social enterprise growth (SEG).
Individually, as the market fluctuated from the former rationale of a product-
based approach to one of service (Vargo and Lusch 2014), consumers aggressively
sought to contribute to each procedure of business activity and intermingle with firms
in association with the business system to generate value, called value co-creation
(VC). From this standpoint, the improvement of SE not only hinges on entrepreneurs
– their roles and actions – but also requires stimulation by cross-sectoral commu-
nication and utilization of resources so that several stakeholders can contribute to the
VC process of SEs (Laszlo and Zhexembayeva 2017). In the construction industry in
most developed countries, firms focus on cross-collaboration among private, public,
and social enterprises’ to create a positive value chain. Such firms usually know what
needs to be done, but how to do it is the foremost hurdle they face. The difficulty
arises because of the diversity of actors involved in the process, the shared benefit
priorities, powers, resources, skills, and the need for creation of efficient rules and
regulations for growth and sustainability (Barraket and Loosemore 2018).
For this reason, we argue that, in addition to profitable complements,
consideration should also be awarded to the practices of co-creation in the SE area
(Sugathan, Ranjan, and Mulky 2017), to better address the customer’s role in the
founding and development of an SE (Helander and Vuori 2017). Nevertheless, it is
also essential to provide a broader view through which VC can be adopted by social
businesses in developing countries (Rahman et al. 2019). However, dramatic
 Value Co-creation and Growth of Social Enterprises 503

changes in the external environment may increase uncertainty, hence impairing

the judgment and capabilities of both parties and diminishing their ability to create
value (Chowdhury, Gruber, and Zolkiewski 2016).
This investigation assimilated the micro-level constructs of SE growth with
comprehensive thinking on a macro-level concerning both environmental ambi-
guity and co-creation processes that are achievable by customers dealing with SE
in developing countries. This study considered the performance of SEs in devel-
oping countries such as Bangladesh, Ghana, India, and Pakistan by consulting the
British council report (Council 2016). Specifically, the current study focused on SE
in Pakistan due to the significant focus of the government and an increasing
number of social enterprises. In Pakistan, SEs are run by younger people, and
many ventures are newly established. The increasing number of female business
leaders in Ghanaian SEs demonstrate that the country is focused on feminine
entrepreneurship trends, moving forward with agendas to broaden gender
equality. Thirty-two percent of SEs in India stated that there was a lack of
awareness among banks and support firms about the importance of SE. Twenty
percent also declared that there was a lack of understanding between them and the
public and customers about SE goals and purposes (Council 2016).
This study adds to the current knowledge base in several ways. First, the
standard framework for SE growth, which had been generally grounded on in-
ternal and individual micro-level variables, was enlarged by the inclusion of a
significant role for co-creation of value on the part of customers. This advanced the
level of social capital and resources, which in turn stimulated the growth of the SE.
Moreover, this study also explored the ways in which VC processes were related to
growth, how the success of VC behaviors in several situations was diminished, the
moderating role of environmental dynamics, and strategies for stimulating the
growth of a SE.
This paper begins with a literature review on social enterprises, their growth and
the influence of VC and environmental dynamics. Next is covered the hypotheses
proposed and the methodology for obtaining data; then, the results of the study are
summarized and evaluated. The report concludes with a discussion of the limitations
and theoretical contributions with suggestions for future expansions of the research.

2 Literature Review
2.1 Social Enterprise (SE)

SE is a term broadly used in societally-based entrepreneurship studies (Zhao,

Zahra, and Qing-Liang 2014). This aspect is a result of Defay’s 1972 book, The
504 W. Li et al.

Sociology of Social Movements (Halsey 1972), in which the concept of the social
entrepreneur was initially proposed. There are also several other theories about the
foundation of SE. Some academicians stated that it came from the “concept of
social economy proposed by” (Cai, Sun, and Shen 2012). Dees (2007) reported that
SEs are derivatives of charity activities directed by civilization. In 2003, Dees
proposed the concept of a “social enterprise spectrum” (Dees 2003), in which SE
was defined as a “multivariate complex, a continuum between purely charitable
organizations and purely for-profit organizations.” Later, Thomas (2004) extended
the idea and considered it a new form of “social economy” and the latest
component of the third sector. Inside the concept of the SE, dual objectives (eco-
nomic and social) are the most emblematic landscapes of SE (Hlady-Rispal and
Servantie 2018); therefore, both economic and societal forces drive SEs (Stevens,
Moray, and Bruneel 2015). Conversely, when matched with profit-making entre-
preneurship, the “economic value of social entrepreneurship” is considered sub-
servient. It is considered one of the essentials but certainly not the dominant one,
and this is truly the vital difference between commercial entrepreneurship and
social entrepreneurship (Estrin, Mickiewicz, and Stephan 2016).
This study refers only to SEs and their importance in developing countries
such as Bangladesh, Ghana, India, and Pakistan. It expands upon SE as an
approach in which firms focus on societal undertakings whose goals are to develop
viable solutions for social problems through their contribution to the operation-
alization of markets systematized in specialized profit-making modes. Table 1
shows the number of social enterprises and their leaders, the areas of major focus,
the plans for growth, and the barriers to be overcome. One of the most common
areas of concentration among SEs is education.

2.2 Social Enterprise Growth (SEG)

SEG is often linked with the achievement of specific goals, for example, “financial
indicators, which, like sales, take different forms” (Delmar, Davidsson, and
Gartner 2003). Several approaches can be employed to assess SEG, such as growth
orientation, collaborative networks, identification of resourcing, and organiza-
tional capabilities (Jenner 2016). Some researchers used strategies based on
business logic, such as increasing production scale and establishment of new
customer groups to study growth (Lyon and Fernandez 2012). Few scholars believe
that the fundamental motivation for SE is to foster social change and resolve
common issues, but rather that its primary focus is still to satisfy the economic
incentives of investors (Zadek, Burns, and Forstater 1997). In their view, SEs should
grow and develop according to the subjective judgment of external stakeholders,
Table : Social enterprise in developing countries.

Variables Items Countries

Bangladesh Ghana India Pakistan

Number of Social Enterprises  ,  million ,,

Gender
Social enterprise leaders Female leaders % % % %
Male % % % %
Average turnover £, £. million £, £,
Focused areas’ Values’ are in %
Education    
Services/health   N/A* 
Agriculture and fisheries N/A*   
Manufacturing    N/A*
Skill development  N/A*  N/A*
Growth plans Values’ are in %
Investing in our team and capacity  N/A*  
Attract new customers or clients    
Expand into new geographic areas   N/A* 
Attract investment to expand    
Develop and launch new products and services  N/A*  
Replicate or franchising  N/A 
Barriers Values’ are in %
Shortage of technical skills    
Cash flows    
Capital debt    
Value Co-creation and Growth of Social Enterprises

Obtaining grant funding    

Lack of access to support and advisory services   N/A* 
Understanding/awareness of SE (general public/customers)    
505

*N/A: Not available. Source: British council report (the state of social enterprise in Bangladesh, Ghana, India, and Pakistan).
506 W. Li et al.

and not by the inclinations of internal stakeholders and indicators (Austin, Ste-
venson, and Wei-Skillern 2006; Greve and Teh 2018). These opinions contribute to
societal attention for the growth of SE.
SE’s ability to allocate, regulate, use and optimize resources (Desa and Basu
2013), and the distinctiveness of a business and governance model are all sup-
posed to influence SEG (George et al. 2015). As SEs are mainly constrained by
opportunities and resources (Vershinina, Woldesenbet Beta, and Murithi 2018),
social entrepreneurs must maintain a constant focus on innovations (Goldsby et al.
2018). During the process of expansion, SE decision makers are challenged by
difficult financial issues associated with securing the necessary resources (Sunley
and Pinch 2012). In parallel with advanced countries, social entrepreneurs in
emerging nations face additional difficulties in attracting and accessing resources
for growth of the business (Sengupta, Sahay, and Croce 2018). Moreover, SE has
more restrictions on human capital due to difficulties in fulfilling the employees’
demands about pay, bonuses, skill upgrading, and economic compensation
(Truong and Barraket 2018).
Compared with profit-making organizations, SE entrepreneurs’ emphasis on
social causes are substantially greater due to resource constraints and, therefore,
they have increased need to search external resources for sustainability (Desa and
Basu 2013). After detailed interviews with 11 founders or managers of SEs, Bicho,
Nikolaeva, and Lages (2018) concluded that the growth of a social enterprise was
grounded on relationship building and customer education. In order to grow social
enterprises must focus on attracting new clients and gradually increasing their
level of awareness of company goals (Table 1). Funding is still one of the critical
barriers to growth, however. In a study based in Ireland, Doyle (2019) revealed that
government policies related to the consumption, production and usage of goods,
and the payment of taxes can decide the suitability and the growth of social
enterprises.

2.3 Value Co-creation (VC)

Under the tenets of product-based theories, clients are the passive beneficiaries of
goods, and organizations compete by offering goods of higher value while
improving product quality and decreasing costs (Vargo and Lusch 2014). With the
increasing emphasis on service, however, most organizations have shifted their
attention towards service-related offerings. Consequently, Vargo and Lusch (2014)
recommended service-based logic (SBL) as a substitute for the previous goods-
based philosophy and the encouragement of VC behavior grounded in company
policy based on service. Under SBL, facilities are not in a specific form, but a
 Value Co-creation and Growth of Social Enterprises 507

general type of give-and-take (Payne, Storbacka, and Frow 2008). Under SBL, the
services provided can include those related to information, technology, and goods,
which are the prime products offered by firms to clients and the basis of their
economic decisions. Services replace products as exchange objects, and the value
of services originates from encouraging partners to generate value that is no longer
created by the organizations alone, but co-created by the firms and their cus-
tomers. The idea of VC was founded on diverse logic. According to “Vargo and
Lusch’s theory, it is built on the macro-concept of the evolution model and eco-
nomic development.” Prahalad and Ramaswamy (2004), proposed that market
competition and strategic management were the drivers used to motivate firms to
amend business policies, strategies, and processes in accord with the new VC
system. Sun and Im (2015) were the first to connect the concept of co-creation of
profit-oriented firms to SE, and claimed that this combination could inspire all
stakeholders to work together to resolve social issues. Pellicano et al. (2014)
reviewed the significance of VC in the context of social innovation and entrepre-
neurship, although these two aspects primarily contain theoretical arguments and
exhibit deficiencies towards real exploration. Lan (2015) investigated the impact of
various stakeholders on the development of SE from the viewpoint of “entrepre-
neurial opportunity co-creation.”
Katre and Salipante (2012) showed that societally-focused entrepreneurs could
develop their approaches to community service goals through involvement with
different groups and by continually reviewing them, which is also congruent with
the concepts of VC. Overall, VC can be defined as “a process of creating value for
both parties and providing solutions by following the concept of SBL, in which
consumers and enterprises make use of the linkage between customers’ resources
and enterprise resources” (Grönroos 2008). When a SE changes its focus from
commercial logic to VC conduct, the organization improves partner relations and
client faithfulness generating more inherent worth for both firms and customers
and resolving societal issues.

2.4 Environmental Dynamics

Environmental dynamics (ED) is the outcome of several forces acting simulta-

neously, comprised of firm size, industry competition, government policies,
market risk, and technology (Jeng and Pak 2016; Tian et al. 2019). It was shown to
have a crucial effect on a firm’s capabilities and knowledge (Scuotto et al. 2017).
Several studies demonstrated the moderating impact of ED on a firm’s perfor-
mance, such as the ability to coordinate, integrate and organize resources (Liu and
Liu 2013), internal education (Chen and Wang 2012), external integration
508 W. Li et al.

mechanisms and knowledge search (Dong 2017), and innovation externalization

(Bei, Jin, and Yuan 2010); hence, an organization’s performance in is advanced by
ED moderation. Based on previous investigations, the dimensions of ED can be
separated into three types. Finkelstein and Boyd (1998) first categorized them
according to various aspects such as instability, unpredictability, and rate of
change. Secondly, a number of researchers defined and separated the ED mea-
surements into the two elements of market demand and technological change (Luo
2000; Tiwana, Konsynski, and Bush 2010). Thirdly, by referring to the outside
“environment analysis models” such as technical, economic, political and social,
and “Porter’s five forces, the dynamic nature of the environment was defined as the
degree of change, including multiple factors such as policy, demographic statis-
tics, social culture, and industrial relations, in addition to the market and technical
environment” (He and Su 2016).
Entrepreneurship in a social context is influenced by economic and social
goals and restrained by economic and political-institutional surroundings (Estrin,
Mickiewicz, and Stephan 2013), especially the significant effects of outside cir-
cumstances on policy-making (Khavul, Chavez, and Bruton 2013). Considering the
nature of SEs, the investigators in this study felt that the third category of ED must
be discussed in depth and ought to define ED due to the unpredictable state of the
continuously varying external conditions. Such fluctuations must be adjusted for
based on the dynamic needs of stakeholders and other influences such as mac-
roeconomic situation, government, and technology. Most of the prior articles
emphasized how community-based entrepreneurship can alter the turbulent so-
cial environment (Haugh and Talwar 2016). An insufficient number of studies
considered the influence of the environment on the SEG (Douglas, Sullivan Mort,
and Cuskelly 2007) and this paper seeks to fill the gaps in our knowledge of how VC
operates under the dynamics of alterations in the external environment.

3 Hypothesis Development
3.1 Value Co-creation and Social Enterprise Growth

Grounded on the SBL, VC is influenced by the firms’ social network systems (Yoon
and Lee 2019). The closer and more diverse the social network, the more likely that
it will include higher value human capital attributes. This enhances the knowledge
base and opens up the stage for innovation, better problem solving and practical
planning for remedying social issues (Estrin, Mickiewicz, and Stephan 2016). VC is
the acquirement of resources via societal systems, mainly through the interaction
and exchange of skills and knowledge. The study of Desa and Basu (2013) showed
 Value Co-creation and Growth of Social Enterprises 509

that confronted with the condition of limited resources, SE seeks to enhance

existing resources to build sustainability and achieve a competitive edge. The
content of VC depends on customer inputs and resources (Aarikka-Stenroos and
Jaakkola 2012), which can, to a certain extent, compensate for the scarcity of
resources innate to SEs. Customers who have abundant outside information re-
sources can offer useful societal innovation for SE (Pellicano et al. 2014).
VC can effectively influence the loyalty of customers (Cossío-Silva et al. 2016),
the firm’s brand value (Luo, Zhang, and Liu 2015), the speed of marketing, and
product design capability (Zhang et al. 2011). These factors can successfully pro-
mote the SE’s appeal, protect the foundations of its products, and ultimately
energize the needs of SEG. VC can also successfully enable customers to recognize
the company’s image and create a link with it (Cossío-Silva et al. 2016). Consumers
have faith in firms to generate value, and their VC behavior contributes to a synergy
between customers and the SE firm’s decision-makers in defining societal values
together (Pellicano et al. 2014). In this case, customer input creates an overall
societal advantages (Nambisan and Baron 2009). Baldwin and Von Hippel (2011)
highlighted that VC in business entities advanced community welfare itself, while
Tajvidi et al. (2017) concluded that interactions of customers with suppliers and
with other customer was critical for social support, and increased the degree of VC.
The SEG requires consideration of both social and economic aims, and VC
conduct itself may play a creative role in encouraging resource acquisition by a SE,
profit-making, social externalities, and customer appreciation. Therefore, this
study suggests the following hypothesis:
H1: Value co-creation has a significant impact on a social enterprise’s growth, the
higher the degree of value co-creation, the higher the degree of social enterprise
growth.

3.2 Moderating Effect

When an organization operates in an uncertain, changing environment, it becomes

subject to several unstructured problems (Galbraith 1973). The capability of
creating, integrating, and acquiring value is often inhibited by the changing as-
pects of the environment (Teece 2018). The relationship between a firm’s external
environment and external knowledge searches related to the dynamic evolution of
an organization’s climate influences the knowledge acquisition procedure
implemented by the firm for resolving problems (Dong 2017). Apart from the skills
and external network links, governmental support is necessary because all these
factors influence the growth of social enterprise (Veronica et al. 2019). Järvi,
Kähkönen, and Torvinen (2018) found that allowing clients to state their views
510 W. Li et al.

improved the VC process, whereas a firm’s averseness to creating VC showed a

significant lack of commitment and incapability to adjust to change, which is
central to the success of social enterprise. Additionally, in the process of VC, if any
one of the participants withholds information, it creates problems and may cause
failure of the VC process (Chowdhury, Gruber, and Zolkiewski 2016). Nevertheless,
due to the greater risk from rapidly fluctuating environments, the appreciation and
value of information flow from both parties in VC can be negatively affected, which
demonstrates that ED may tip the balance towards the contrary. A study of 172
Chinese municipalities found adverse moderating effects on the relationship be-
tween VC and the growth of SE (Ge, Xu, and Pellegrini 2019).
Overall, the consequences of ED on SEG have not been well studied. Therefore,
based on the analysis of several scholars, the acquisition of resources, and the
determinants of co-creation letdown, this study supports the idea that ED in-
fluences SEG and has a significant moderating effect. Therefore, the following
hypothesis was proposed:
H2: Environmental dynamics has a significant moderating impact on VC–SEG
relationship, the higher the degree of environmental dynamics, the higher the degree
of effects.

4 Research Methodology
4.1 Sampling and Data Collection

To define the sample size, we employed the theoretical concept of SE defined at

YES Network Pakistan (Khan 2017). It states that SEs are intended to address a
social problem, offer goods and services in severe market conditions, reinvest
surplus, and employ democratic principles of ownership and autonomy in deci-
sion making. Based on their primary mission and goals, SEs were judged and
included in the sample. SEs are still at an initial stage in developing countries like
Pakistan. A stratified random sampling approach was employed in the present
study as favored by numerous scholars to measure the effects of value co-creation
(Fernando and Chukai 2018; Santos-Vijande, López-Sánchez, and Pascual-Fer-
nandez 2018); it is considered a common approach in organizational and behav-
ioral studies (Bono and McNamara 2011) as well as in consumer behavior (Getz and
Brown 2006). However, the utilization of a random sampling approach can be
difficult when the population is large (Chou, Lu, and Chang 2014).
In total, 431 self-administered questionnaires were distributed for data
collection. After excluding those with incomplete or inaccurate information, 400
valid responses were used for data analysis, a response rate of 91.5%. The
 Value Co-creation and Growth of Social Enterprises 511

respondents were assured that their participation would remain voluntary,

confidential, and anonymous. Data were collected by field survey from January
2019 to June 2019 from the four provinces of the country, Sindh, Punjab, Balu-
chistan, and Khyber Pakhtunkhwa. The reason for collecting data with a six
months’ lag time was to lessen common-method bias (Khan et al. 2019).

4.2 Respondents’ Profiles

As shown in Table 2, out of the 400 respondents, 337 (84.3%) were male, and 63
(15.6%) were female. Taking education into account, 173 (43.2%) had a masters
degree, while 132 (33.0%) had an undergraduate degree. In terms of occupation,
190 respondents (47.5%) were in positions at the top management level. Among
the social enterprises, 175 (43.7%) focused on female education, a significant issue,
followed by 113 (28.25%) attempting to reduce poverty. Most of the respondents
(127.5; 31.8%) resided in Sindh followed by Baluchistan (115; 28.75 %).

4.3 Measurement Scale

A 5-point Likert scale (1 – strongly disagree to 5 – strongly agree) was used in the
study to record the response level of participants. The construct of VC measured by
a 5-item scale was “1-We identify issues of the demand side with potential cus-
tomers; 2-we establish a joint team with potential customers, to resolve problems
of products and services; 3-we have numerous face-to-face communications with
potential customers; 4-we organize processes and resources together with poten-
tial customers; 5-we mutually make judgment and take risks when meeting any
conflict of interest.” adopted from the previous studies of Taghizadeh et al. (2016)
and Yi and Gong (2013). SEG was assessed by five items “1-Numerically, company
performance is much better comparative to similar enterprises and competitors; 2-
It is predicted that the several large enterprise donations will continue expanding;
3-Number of employees in enterprise grows rapidly comparative to similar enter-
prises and competitors; 4-Number of beneficiaries in enterprise grows rapidly
comparative to similar enterprises and competitors; 5-The scale of the enterprise is
expected to continue expanding.” taken from the studies of Venkataraman (1997),
Meng et al. (2011), Porter and Strategy (1980), and Ge et al. (2019). The construct of
ED was measured using five items “1-Macroeconomic fluctuations; 2-Number of
competitors and competition; 3-Government regulation; 4-Potential Customer
behavior; 5-Vendors (price, technological changes, etc.)” adapted from the pre-
vious studies of Chen and Wang (2012).
512 W. Li et al.

Table : Respondents’ information.

Size (n = ) Percentage

Gender
Male  .
Female  .
Education level
Junior/Senior High School  .
Undergraduate  .
Master’s  .
Postgraduate  .
Management level
Top level  .
Middle level  .
Lower level  .
Social problem to resolve
Poverty reduction  .
Protection of environment  .
Female education  .
Helping disabled persons  .
Provinces
Sindh . .
Baluchistan  .
Punjab  .
Khyber Pakhtunkhwa . .

5 Results and Analysis

The PLS-SEM method was chosen as the preferred way to handle the latent vari-
ables and show their significant relationships with the observable constructs.
The bases for selecting PLS path modeling were as follows: First, it has
received widespread application in management research and related disciplines
(Hair et al. 2012; José and Manuel 2012; Real et al. 2014). Second, given that the aim
of the this study was to estimate the dependent variable, we considered PLS path
modeling to be a appropriate analytical approach (Hair et al. 2011). Finally, this
modeling is considered as the “most fully developed and general system”
(McDonald 1996, p. 240) of the variance-based structural equation modeling (SEM)
techniques. Accordingly, the present study utilized Smart PLS-3 software (Ringle
et al. 2015). In addition, PLS is consider robust in the face of model mis-
specification, missing values, and violation of the usual statistical assumptions of
latent variable modeling (Cassel et al. 1999, 2000).
 Value Co-creation and Growth of Social Enterprises 513

In particular, estimated research stream in PLS has provided complementary

approach for measuring the results’ robustness (Hair et al. 2018; Latan 2018). Such
robustness checks have become common in regression-based studies, where
scholars investigates “how certain ‘core’ regression coefficient estimates behave
when the regression specification is modified in some way, typically by adding or
removing regressors” (Lu and White 2014: p. 194).
For the robustness, of model recommended test in SMRTPLS includes Inner
VIF used to test common method bias (Kock 2015), co-efficient of determination
used to describe the power effects of variables used into the study (Sarstedt et al.
2019) and Q2 used to reflects the predictive power and relevance (Umrani, Kura,
and Ahmed 2018)
For analysis of the results, the partial least square structural equation
modeling (PLS-SEM) approach was utilized. Several tests were conducted mainly
related to reliability, validity, and path coefficients, as well as to ensure that the
data were free from multi-collinearity, and other data related biases (Hair et al.
2010). The analysis section used a two-model approach for assessment of the
results: (1) the measurement model and (2) the structural model (Hair et al. 2010).
1. An assessment of the measurement model

According to Henseler, Ringle, and Sinkovics (2009), to evaluate the study

model researchers are required to assess the “individual item reliability, internal
consistency, content validity, convergent validity, and discriminant validity.”
Individual item reliability is measured by taking into account the outer loadings
of items related to a particular dimension (Hair et al. 2012). Hair Jr et al. (2016)
recommended that the value should be between 0.40 and 0.70. All the values listed
in Table 3 are in the range of 0.742 to 0.895, thus adequately meeting the standards.
According to the rule of thumb set by Nunnally (1978), the value of Cronbach’s
alpha should be >0.7. As displayed in Table 3, the values of CA fall between 0.902
and 0.929. Therefore, it was concluded that the measures of the present study
adequately met the standards of reliability.
Internal consistency reliability. Bagozzi and Yi’s (1988) rule of thumb stated
that the value of composite reliability should be ≥0.7. The coefficient values of the
CR of the constructs fall within the range of 0.842 to 0.928, demonstrating the
reliability of the measures (Table 3).
Convergent validity. Per the rule of thumb of Fornell and Larcker (1981), the value
of AVE should be 0.5 or greater. The values of AVE are between 0.649 and 0.722,
which means that this study has a satisfactory level of convergent validity (Table 3).
Discriminant validity. Two methods were used to evaluate the discriminant
validity of the variables: (1) It was ensured that the cross-loadings of indicators
should be higher than any other opposing constructs (Hair et al. 2012);
514 W. Li et al.

(2) According to the Fornell and Larcker (1981) criterion, “the square root of AVE
for each construct should exceed the inter-correlations of the construct with
other model constructs”. Hence, both approaches ensured the validity of the
results (Table 4).
2. An assessment of the Structural Model
This study utilized PLS bootstrapping with 500 bootstraps and 400 cases to
depict the path coefficients and their significance (Henseler, Ringle, and Sinkovics
2009). Figure 1 gives a comprehensive depiction of evaluations of the structural
model along with the statistics related to moderating environmental dynamics.
Collinearity of the structural model. Collinearity issues were assessed by
measuring the variance inflation factor (VIF) values of all sets of variables. The VIF
is defined as the reciprocal of tolerance. According to Hair, Ringle, and Sarstedt
(2011), a tolerance value of 0.20 or lower and values greater than 5 indicate a
collinearity problem. The results displayed in Table 5 proved that there was no
collinearity issue.
Coefficient of determination. To evaluate the variance of the measures ac-
cording to PLS-SEM, the R2 coefficient, which is also known as the coefficient of
determination was calculated (Hair, Ringle, and Sarstedt 2011). According to
Cohen’s rules (1998), the R2 values of 0.60, 0.33, and 0.19 were described as sub-
stantial, moderate, and weak, respectively. Hair et al. (2010) believed that the R2
coefficient was subject to the environment where a specific study was conducted.
However, as Falk and Miller (1992) recommended, R2 coefficients of 0.10 were also

Table : Measurement model evaluation.

Constructs Loadings Items CA CR AVE

Environmental ED . . . .

Dynamics (ED) ED .
ED .
ED .
ED .
Social Enterprise Growth (SEG) SEG . . . .
SEG .
SEG .
SEG .
SEG .
Value Co-creation (VC) VC . . . .
VC .
VC .
VC .
VC .
 Value Co-creation and Growth of Social Enterprises 515

Table : Discriminant validity coefficients.

  

ED .**
SEG . .**
VC . . .**
**Bold values represent the square root of the average variance extracted (AVE).

acceptable. In the present study, R2 was around 0.399, which indicated that a
39.9% variation in SEG occurred because of VC (Table 5).
The effect sizes (f 2). Editors and reviewers mostly prefer this measure. The
values of 0.02, 0.15, and 0.35, represent small, medium, and significant effects,
respectively (Cohen 2013). If the value of f 2 is <0.02, it indicates that there is no
effect. The results of the study reflected in Table 5 proved that there was an effect.
Predictive relevance (Q2) of the model. This study employed the cross-validated
redundancy measure Q2, for evaluating the model (Ringle, Sarstedt, and Straub
2012). It is an indicator of the model’s out-of-sample predictive power and rele-
vance (Geisser 1974; Stone 1974) Q2. In the structural equation model, Q2 values
larger than zero for a specific reflective endogenous latent variable indicate the
path model’s predictive relevance for a particular dependent construct. As a
relative measure of predictive relevance, Q2 values of 0.02, 0.15, and 0.35,
respectively, correspond to a small, medium, or large predictive relevance for a
specific endogenous construct. Hence, as reflected in Table 5, the results of this
study show that the model has medium predictive relevance.

Figure 1: Structural equation modeling.

516 W. Li et al.

Table : Inner VIF, effect size (f ), coefficient of determination (R), and effect size (Q).

Inner VIF Effect Size (f ) Coefficient of determination Effect Size (Q)

SEG SEG (R) Q (=−SSE/
SSO)

ED . .
SEG . .
VC . .
VC*ED . .

Testing the moderation effect. The product indicator techniques utilizing PLS-
SEM were administered to identify and assess the moderating effect of environ-
mental dynamics (ED) on VC and SEG (Chin 2010). This study employed a product
indicator method because the suggested moderating construct was continuous
(Rigdon, Schumacker, and Wothke 1998). Cohen’s (1998) rules were used for
assessing the moderating effects. With regard to H2,
It was proposed that ED moderated the relationship between value co-creation
and social enterprise growth. As estimated, it was proposed that the interaction
terms (VC*ED → β = −0.197, t = 2.699, p = 0.008) were significant (Table 6, Figure 1).
Hence, H2 was supported.
The slope for the relationship between VC and SEG became stronger when ED
had less effect (Figure 2).
Determining the strength of the moderating effects. The power of moderating
effects was evaluated by comparing the R2 values of the primary model and the full
model (Henseler and Fassott 2010). The strength of the moderating effects was
assessed using the formula below (Cohen 1998):

R2  model with a moderator − R2  model without moderator
Effect Size : (f )2 =
1 − R2  model with moderator
The values, 0.02, 0.15, and 0.35, represent the weak, moderate, and substantial
moderating effects sizes, respectively (Cohen 1998). As per the rule of Cohen
(1998), the power of the moderating effect of leadership was assessed (Table 7).
Chin, Marcolin, and Newsted (2003) stated that a small effect size does not
necessarily mean that the causal moderating effect is irrelevant. “Even a small
interaction effect can be meaningful under extreme moderating conditions; if the
resulting beta changes are meaningful, then it is important to take these conditions
into account.” This suggests that the moderating role of ED in the relationship
between value co-creation and social enterprise growth could be significant.
Using PLS-SEM, this study tested a hypothesized model that showed a sig-
nificant relationship between value co-creation and social enterprise growth
 Value Co-creation and Growth of Social Enterprises 517

Table : Path coefficients and hypothesis testing.

Hypothesis Relationship Path SD t-value p-value Decision

Coefficient

H VC → EG . . . .** Supported

Moderating . . . .** Supported
Variable
Moderation Effect
H VC*ED → Social −. . . .** Supported
Enterprise Growth
** shows the critical level of significance, used if p-value <..

(β = 0.340, p = 0.008) and demonstrated a significant moderating effect of ED on

the relationship between value co-creation, and social enterprise growth
(β = −0.197, p = 0.008). Figure 2 displays the moderating interaction effects of ED
on the relationship between VC and SEG. Some organizations showed a greater
impact on their growth while some of them had less, revealing that the relationship
between VC and SEG was stronger when the environmental impact was weaker.

6 Discussion and Conclusions

The results in Table 6, demonstrate that SEG was affected by VC, which effectively
proves H1. The data correspond with the idea that the VC behavior among SE and
partners efficiently advanced firms’ performance and promoted growth. By
contributing to the flexibility of firms through VC, customers can improve the

4.5

3.5
Low ED
3

2.5
High ED
2

1.5

1
Low VC High VC

Figure 2: Moderation effect.

518 W. Li et al.

market performance and overall efficiency, which dovetails with the notion of co-
creation posited by Prahalad and Ramaswamy (2004). It also confirms the concept
suggested by Pellicano et al. (2014) that customers’ value co-creation can advance
the resource amalgamation of SE and the capability to resolve social issues.
According to the “resource-based theory, the competitive advantage of an
organization comes from the dissimilarity in resources”(Rua, França, and Fer-
nández Ortiz 2018). More than 50% of SEs in Pakistan are looking forward to
developing innovative goods and services, showing that there is a strong impulse
for innovation (Council 2016). The acquisition and utilization of resources is a
crucial part of successful entrepreneurship (Bacq and Eddleston 2018). In the
process of VC, organizations and consumers generate value through collaboration
and the merging of resources from both parties. This is especially true for func-
tional resources such as the knowledge and information provided by customers
(Vargo and Lusch 2014) that firms can use to obtain external capital and a
competitive edge. When SEs lack resources, they will seek help from social net-
works (e. g., politicians, private institutions, and landlords) for improving sus-
tainability and viability.
The current study adds to the mounting literature on VC, SEG, and ED.
Initially, this work emphasized the dimensions of SEG, which are vital when
focusing on societal issues and resource utilization. More precisely, we have
proposed two hypotheses. H1 was supported with a positive beta coefficient of
0.340, S.D = 0.113, t = 3.004, and p < 0.008. Results were positive and statistically
significant and agreed with the data of Ge et al. (2019). H2 was supported with a
negative beta coefficient of −0.197, S.D = 0.073, t = 2.699, and p < 0.008. The results
of the hypotheses supported as t-values are >2 and p < 0.05. The results of the study
were consistent with the previous studies. Keeping in view the theory of value co-
destruction, it is not mandatory that all the stakeholders generate positive out-
comes; some of their consequences can be negative because of the different levels
of tasks they perform. The mechanism of value co-creation can become affected
due to the distinctive role of participants, their motives and benefits. As the
number of externalities increases, SEs face a greater level of shortages related to

Table : Strength of moderating effects based on Cohen’s rules (Cohen ).

Endogenous latent vari- R R Interaction f Effect

able included excluded terms size

Social Enterprise Growth . . VC*ED . Small

 Value Co-creation and Growth of Social Enterprises 519

funding, human capital, and information accumulation, which in turn decreases

the potential for value creation during the growth of the SE.
In conclusion, it’s agreed that external environmental factors such as insti-
tutional norms and funding (Davies, Haugh, and Chambers 2018), governmental
support and advice for the establishment of enterprises, lack of technical skills and
social capital (Habersetzer et al. 2019), and unawareness can hinder the growth
and sustainability of SEs. Those SEs in developing countries are especially sus-
ceptible to difficulties in obtaining funding, technical skills, capital, and support
(Table 1). In order to strengthen the link between customers and the growth of the
social enterprise, government and other established institutions (social enter-
prises) need to launch awareness programs, conduct free training workshops and
education programs, and provide marketing and advertising opportunities in
developing countries like Pakistan. The government should also provide funding
incentives, relaxation of taxes, and legal advice.

7 Limitations and Future Recommendations

Despite its many contributions and significant findings, this study is not free from
limitations. First, though this research is grounded on time-lagged data, common
methods bias cannot be ruled out. The data was collected from respondents in
different provinces with varied cultures and geography, which may have influ-
enced their responses. Future studies can use longitudinal data to derive conclu-
sions about these interrelations. Second, the study was based on a sample from
Pakistan. Examining these relationships in other emerging and developed states
would be useful for testing the generalizability of the data. Since only the single
dependent variable of VC was studied in relation to social enterprise growth, future
studies are needed to target other dimensions antecedent to VC. This study can be
expanded to other industries and economic sectors to determine if there are any
differences in data due to type of business. For example, this study could be carried
forward by researching the effects of VC on the performance of service industries.

8 Theoretical Contribution
Growth has always been a primary focus of SE and numerous researchers have
explored how the acquisition of resources and internal capacity can stimulate SEG
(Felício, Gonçalves, and da Conceição Gonçalves 2013). Conversely, there is a
deficiency in investigations on how to enhance the viability of SE based on market-
logic, particularly the effects of location. This paper illustrates the distinctive dual
520 W. Li et al.

goals of SE (Chell et al. 2016). Under the SBL, the VC behavior efficiently encour-
ages the growth and sustainability of SE, and the manifold interactions among
firms and patrons efficiently assist SE to assimilate resources and to enhance value
to meet customers’ needs as well as to solve societal issues. We have tried to offer a
theory-based road map for strategically advancing the growth of SE.
Secondly, most research on VC at the present emphasizes case studies,
concentrating on how profit-making firms practice this method to enhance per-
formance, particularly in branding (Merz, He, and Vargo 2009). This study sought
to introduce a new level of scholarship in the investigation of VC as it affects SEG in
for-profit firms. Our data confirm that the input of consumers should be listened to
and seriously considered by a SE in making vital decisions on growth plans. By
widening the inquiry’s scope on VC, this study dug deeper into the philosophies of
VC and established a forward-looking view that such a focus plays a crucial role in
the building of a firms’ competitiveness and advancement of its performance.
In prior studies, VC always played key role to improve the firm’s performance
(Bobbink, Hartmann, and Dewulf 2016), which is an emerging trend enterprises
must follow this trend. Though, a large number of social enterprises still adopting
the VC modes and behaviors which cannot accomplish improve performance. In
reality, co-destruction is result of VC (Järvi, Kähkönen, and Torvinen 2018).
This study includes the environmental dynamics into the proposed model,
constructs shows the negative moderating effects in the process of VC and reflects that
environment may be significant determinant effecting the failure of VC or co-
destruction of VC. Through detailed analysis, this article explains that VC cannot
effectively improve SEG in some practices. While, at the same time, this scholarship
broadens the understanding of VC in developing countries (Barrutia and Echebarria
2012), also expands existing literature from single factor VC towards moderating effect
and filled the gap of moderation effect between VC and SEG. The comparative analysis
of four countries also contribute to existing literature of developing countries.
This study is different in several ways. First, this study reflects the comparative
analysis of four developing countries (Bangladesh, Ghana, India, and Pakistan).
Constructs used for developing countries and respondents are also distinctive.
Second, most of respondents in sample are top level and middle level man-
agers, who possess wider information and consider valuable for organizational
studies due to decision making power (Vanhala and Ritala 2016). In contrast the
mentioned study did not reflects the proportion of employee level.
Third, the sample size of the study is adequate to justify the significance of the
study, for instance the strength our proposed model is explain 39.9% variance, in
contrast to 27.7% (Table 8). In addition, the path coefficient of value co-creation to
social enterprise growth is 0.340, while other study has 0.064. Furthermore,
 Value Co-creation and Growth of Social Enterprises 521

Table : Comparative analysis.

Path co-efficient R

Hypothesis This study Other study This study Other study

VC → SEG . .

ED → SEG . . . .
Interaction −. −.

moderation interaction coefficient found larger in this study −0.197 comparative to

−0.172.
Finally, this study is distinctive from the cultural perspective, the government
regulations, and macroeconomic situations, customer-driven and suppliers con-
tacting process for the social enterprises operating in country is quite distinctive
from China (Defourny and Nyssens 2014; Yu 2013).

References
Aarikka-Stenroos, L, and E. Jaakkola. 2012. “Value Co-creation in Knowledge Intensive Business
Services: A Dyadic Perspective on the Joint Problem Solving Process.” Industrial Marketing
Management 41: 15–26.
Agbozo, G. K., I. S. Owusu, M. A. Hoedoafia, and Y. B. Atakorah. 2017. “The Effect of Work
Environment on Job Satisfaction: Evidence From the Banking Sector in Ghana.” Journal of
Human Resource Management 5 (1): 12–8.
Alegre, I., S. Kislenko, and J. Berbegal-Mirabent. 2017. “Organized Chaos: Mapping the Definitions
of Social Entrepreneurship.” Journal of Social Entrepreneurship 8 (2): 248–64.
Austin, J., H. Stevenson, and J. Wei‐Skillern. 2006. “Social and Commercial Entrepreneurship:
Same, Different, or Both?” Entrepreneurship Theory and Practice 30 (1): 1–22.
Bacq, S., and K. A. Eddleston. 2018. “A Resource-Based View of Social Entrepreneurship: How
Stewardship Culture Benefits Scale of Social Impact.” Journal of Business Ethics 152 (3): 589–611.
Bagozzi, R. P., and Y. Yi. 1988. “On the Evaluation of Structural Equation Models.” Journal of the
Academy of Marketing Science 16 (1): 74–94.
Baldwin, C, and E. Von Hippel. 2011. “Modeling a Paradigm Shift: From Producer Innovation to User
and Open Collaborative Innovation.” Organization Science 22 (6): 1369–683.
Barraket, J, and M. Loosemore. 2018. “Co-Creating Social Value Through Cross-Sector
Collaboration Between Social Enterprises and the Construction Industry.” Construction
Management and Economics 36 (7): 394–408.
Barrutia, J. M, and C. Echebarria. 2012. “Greening Regions: The Effect of Social Entrepreneurship,
Co-decision and Co-creation on the Embrace of Good Sustainable Development Practices.”
Journal of Environmental Planning and Management 55 (10): 1348–68.
Bobbink, M., A. Hartmann, and G. Dewulf. 2016. “Sustaining Extended Enterprise Performance: A
Value Co-creation Perspective.” Journal of Organization Design 5 (1): 1–10.
522 W. Li et al.

Bei, W., C. Jin, and W. Yuan. 2010. “The Moderation Effect of Environment Dynamism on the
Relationship Between R&D Outsourcing Intensity and Firm Performance.” Science Research
Management 31 (4): 23–30.
Bicho, M., R. Nikolaeva, and C. Lages. 2018. Social Enterprise Legitimacy in a Hostile Market.
Academy of Marketing Science World Marketing Congress.
Bono, J. E., and G. McNamara. 2011. Publishing in AMJ—Part 2: Research Design. NY: Academy of
Management Briarcliff Manor.
Cai, N., Sun, W., Shen, Q. 2012. “Literature Review and Prospect of Social Enterprises”. Science
and Technology Management Research 2012 (14): 131–5.
Cassel, C., Hackl, P., Westlund, A. H. 1999. “Robustness of partial least-squares method for
estimating latent variable quality structures”. Journal of applied statistics 26 (4): 435–446.
Cassel, C. M., P. Hackl, and A. H. Westlund. 2000. “On Measurement of Intangible Assets: A Study
of Robustness of Partial Least Squares”. Total Quality Management 11: 897–907.
Chell, E., L. J Spence, F. Perrini, and J. D Harris. 2016. Social Entrepreneurship, Social Innovation
and Business Ethics. Vol. 133, Springer.
Chen, G. Q, and X. H. Wang, , 2012. “The Moderating Effect of Environmental Dynamism on the
Relationship Between Organizational Learning and Performance.” R&D Management 24 (1):
52–9.
Chin, W. W. 2010. “How to Write Up and Report PLS Analyses.” In Handbook of Partial Least
Squares, 655–690. Springer.
Chin, W. W, B. L. Marcolin, and P. R. Newsted. 2003. “A Partial Least Squares Latent Variable
Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation
Study and an Electronic-Mail Emotion/Adoption Study.” Information Systems Research 14
(2): 189–217.
Chou, P. F., C.-S. Lu, and Y.-H. Chang. 2014. “Effects of Service Quality and Customer Satisfaction
on Customer Loyalty in High-Speed Rail Services in Taiwan.” Transportmetrica A: Transport
Science 10 (10): 917–45.
Chowdhury, I. N., T. Gruber, and J. Zolkiewski. 2016. “Every Cloud has a Silver Lining—Exploring
the Dark Side of Value Co-creation in B2B Service Networks.” Industrial Marketing
Management 55: 97–109.
Cohen, J. 1998. Statistical Power Analysis for the Behavioural Sciences, xxi. Hillsdale, NJ: L
Erlbaum associates.
Cohen, J. 2013. Statistical Power Analysis for the Behavioral Sciences. Routledge.
Cossío-Silva, F. J, M. Á Revilla-Camacho, M. Vega-Vázquez, and B. Palacios-Florencio. 2016. “Value
Co-creation and Customer Loyalty.” Journal of Business Research 69: 1621–5.
Council, B. 2016. The State of Social Enterprise in Bangladesh, Ghana, India and Pakistan, Author.
Manchester, UK: British Council.
Davies, I. A., H. Haugh, and L. Chambers. 2018. “Barriers to Social Enterprise Growth.” Journal of
Small Business Management 57 (4): 1616–36.
Dees, J. G., 2003. “New Definitions of Social Entrepreneurship: Free Eye Exams and Wheelchair
Drivers.” Knowledge@ Wharton Newsletter 12 (10):, 3–16.
Dees, J. G. 2007. “Taking Social Entrepreneurship Seriously.” Society 44 (3): 24–31.
Defourny, J., and M. Nyssens. 2014. “The EMES Approach of Social Enterprise in a Comparative
Perspective.” In Social Enterprise and the Third Sector, 58–81. Routledge.
Defourny, J., and M. Nyssens. 2017. “Fundamentals for an International Typology of Social
Enterprise Models.” VOLUNTAS: International Journal of Voluntary and Nonprofit
Organizations 28 (6): 2469–97.
 Value Co-creation and Growth of Social Enterprises 523

Delmar, F., P. Davidsson, and W. B. Gartner. 2003. “Arriving at the High-Growth Firm.” Journal of
Business Venturing 18 (2): 189–216.
Desa, G., and S. Basu. 2013. “Optimization or Bricolage? Overcoming Resource Constraints in
Global Social Entrepreneurship.” Strategic Entrepreneurship Journal 7 (1): 26–49.
Dong, Z. L. 2017. Ph.D. Thesis. In External Knowledge Search, Knowledge Integration Mechanism
and Enterprise’s Innovation Performance: The Moderation Effect of External Environment
Characteristics. China: Changchun.
Douglas, H., G. Sullivan Mort, and G. Cuskelly. 2007. “Analyzing Elements Affecting the Survival of
New Nonprofit Organizations in the Context of Social Entrepreneurship Ventures.” In
Proceedings of the 4th International Entrepreneurship Research Exchange. Brisbane:
Queensland University of Technology.
Doyle, G. 2019. “A New Era for Reuse Social Enterprises in Ireland? The Capacities Required for
Achieving Sustainability.” Resources, Conservation and Recycling 149: 65–74.
Estrin, S., T. Mickiewicz, and U. Stephan. 2013. “Entrepreneurship, Social Capital, and
Institutions: Social and Commercial Entrepreneurship Across Nations.” Entrepreneurial
Theory Practical 37 (3): 479–504.
Estrin, S., T. Mickiewicz, and U. Stephan. 2016. “Human Capital in Social and Commercial
Entrepreneurship.” Journal of Business Venturing 31 (4): 449–67.
Falk, R. F., and N. B. Miller. 1992. A Primer for Soft Modeling. University of Akron Press.
Felício, J. A., H. M. Gonçalves, and V. da Conceição Gonçalves. 2013. “Social Value and
Organizational Performance in Non-profit Social Organizations: Social Entrepreneurship,
Leadership, and Socioeconomic Context Effects.” Journal of Business Research 66 (10):
2139–46.
Fernando, Y., and C. Chukai. 2018. “Value Co-creation, Goods and Service Tax (GST) Impacts on
Sustainable Logistic Performance.” Research in Transportation Business & Management 28:
92–102.
Finkelstein, S., and B. K. Boyd. 1998. “How Much Does the CEO Matter? The Role of Managerial
Discretion in the Setting of CEO Compensation.” Academy of Management Journal 41: 179–99.
Fornell, C., and D. F. Larcker. 1981. “Evaluating Structural Equation Models With Unobservable
Variables and Measurement Error.” Journal of Marketing Research 18 (1): 39–50.
Galbraith, J. R. 1973. Designing Complex Organizations. Designing Complex Organizations. MA,
USA: Addison-Wesley Pub. Co.
Ge, J., H. Xu, and M. Pellegrini. 2019. “The Effect of Value Co-creation on Social Enterprise Growth:
Moderating Mechanism of Environment Dynamics.” Sustainability 11 (1): 250.
Geisser, S. 1974. “A Predictive Approach to the Random Effect Model.” Biometrika 61 (1): 101–7.
George, G., R. Rao-Nicholson, C. Corbishley, and R. Bansal. 2015. “Institutional Entrepreneurship,
Governance, and Poverty: Insights From Emergency Medical Response Services in India.” Asia
Pacific Journal of Management 32 (1): 39–65.
Getz, D., and G. Brown. 2006. “Critical Success Factors for Wine Tourism Regions: A Demand
Analysis.” Tourism Management 27 (1): 146–58.
Goldsby, M. G., P. M. Kreiser, D. F. Kuratko, J. W. Bishop, and J. S. Hornsby. 2018. “Social
Proactiveness and Innovation: The Impact of Stakeholder Salience on Corporate
Entrepreneurship.” Journal of Small Business Strategy 28 (2): 1–15.
Greve, H. R., and D. Teh. 2018. “Goal Selection Internally and Externally: A Behavioral Theory of
Institutionalization.” International Journal of Management Reviews 20: S19–38.
Grönroos, C. 2008. “Service Logic Revisited: Who Creates Value? And Who Co-creates?” European
Business Review 20 (4): 298–314.
524 W. Li et al.

Habersetzer, A., S. Grèzes-Bürcher, R. Boschma, and H. Mayer. 2019. “Enterprise-Related Social

Capital as a Driver of Firm Growth in the Periphery?.” Journal of Rural Studies 65: 143–51.
Hair, J. F., C. M. Ringle, and M. Sarstedt. 2011. “PLS-SEM: Indeed a Silver Bullet.” Journal of
Marketing theory and Practice 19 (2): 139–52.
Hair, J. F., W. C. Black, B. J. Babin, and R. E. Anderson. 2010. Multivariate Data Analysis: Global
Edition. Upper Saddle River, NJ: Pearson Higher Education.
Hair, J. F., M. Sarstedt, T. M. Pieper, and C. M. Ringle. 2012. “The Use of Partial Least Squares
Structural Equation Modeling in Strategic Management Research: A Review of Past Practices
and Recommendations for Future Applications.” Long Range Planning 45 (5–6): 320–40.
Hair, J. F., Jr, G. Tomas M. Hult, C. Ringle, and M. Sarstedt. 2016. A Primer on Partial Least Squares
Structural Equation Modeling (PLS-SEM). Sage publications.
Hair, J. F., C. M. Ringle, S. P. Gudergan, Fischer, A., Nitzl, C., Menictas, C., 2018. Partial Least
Squares Structural Equation Modeling-Based Discrete Choice Modeling: An Illustration in
Modeling Retailer Choice. Business Research 12, 115–42.
Halsey, A. H. 1972. Trends in British Society Since 1900: A Guide to the Changing Social Structure of
Britain. Springer.
Haugh, H. M., and A. Talwar. 2016. “Linking Social Entrepreneurship and Social Change: The
Mediating Role of Empowerment.” European Business Ethics 133: 643–58.
He, X., and X. H. Su. 2016. “The Relationship Between Strategy Alliance of New Ventures and
Organizational Legitimacy Under Environmental Dynamism From the Perspective of
Organizational Learning.” Science Research Management 37 (2): 90–7.
Helander, N., and V. Vuori. 2017. “Value Co-creation Analysis in Customer–Supplier Network
Relationships.” In Practices for Network Management, 251–262. Springer.
Henseler, J., and G. Fassott. 2010. “Testing Moderating Effects in PLS Path Models: An Illustration
of Available Procedures.” In Handbook of Partial Least Squares, 713–35. Springer.
Henseler, J., C. M. Ringle, and R. R. Sinkovics. 2009. “The Use of Partial Least Squares Path
Modeling in International Marketing.” In New challenges to international marketing,
277–319. Emerald Group Publishing Limited.
Hlady‐Rispal, M., and V. Servantie. 2018. “Deconstructing the Way in Which Value is Created in the
Context of Social Entrepreneurship.” International Journal of Management Reviews 20 (1):
62–80.
Hynes, B. 2009. “Growing the Social Enterprise–Issues and Challenges.” Social Enterprise Journal
5 (2): 114–25.
Järvi, H., A. K. Kähkönen, and H. Torvinen. 2018. “When Value Co-creation Fails: Reasons That Lead
to Value Co-destruction.” Scandinavian Journal of Management 34: 63–77.
Jeng, D. J. F., and A. Pak. 2016. “The Variable Effects of Dynamic Capability by Firm Size: The
Interaction of Innovation and Marketing Capabilities in Competitive Industries.”
International Entrepreneurship and Management Journal 12 (1): 115–30.
Jenner, P. 2016. “Social Enterprise Sustainability Revisited: An International Perspective.” Social
Enterprise Journal 12 (1): 42–60.
José, L. R., and J.S.-F. Manuel. 2012. “Variance-based Structural Equation Modeling: Guidelines for
Using Partial Least Squares in Information Systems Research”, In Research Methodologies,
Innovations and Philosophies in Software Systems Engineering and Information Systems,
edited by M. Manuel, G. Ovsei, L. S. Annette, and R. Mahesh, 193–221. Hershey, PA: IGI
Global.
 Value Co-creation and Growth of Social Enterprises 525

Katre, A., and P. Salipante. 2012. “Start‐up Social Ventures: Blending Fine‐Grained Behaviors
From Two Institutions for Entrepreneurial Success.” Entrepreneurship Theory and Practice 36
(5): 967–94.
Khan, A. R., 2017. Social Entrepreneurship in Pakistan. Youth Engagement Services (YES) Network
Pakistan. http://yesnetworkpakistan.org/blog/2017/11/14/social-entrepreneurship-in-
pakistan/.
Khan, M. S. Aamir, M. Areeba, J. Du, S. Saleem, K. B. Boamah, U. Javed, and M. Usman. 2019.
“Rejuvenating The Concept Of Work Alienation Through Job Demands-Resources Model And
Examining Its Relationship With Emotional Exhaustion And Explorative And Exploitative
Learning.” Psychology Research and Behavior Management 12: 931–41.
Khavul, S., H. Chavez, and G. D. Bruton. 2013. “When Institutional Change Outruns the Change
Agent: The Contested Terrain of Entrepreneurial Microfinance for Those in Poverty.” Journal of
Business Venturing 28: 30–50.
Kock, N. 2015. “Common Method Bias in PLS-SEM: A Full Collinearity Assessment Approach.”
International Journal of e-Collaboration (IJEC) 11 (4): 1–10.
Lan, Z. Q. 2015. Research on the Influencing Mechanism of Opportunity Co-Creation on the Growth
of Social Enterprises—Based on the Moderating Effect of Entrepreneurial Resources. Beijing,
China: Central University of Finance and Economics.
Latan, H. 2018. PLS Path Modeling in Hospitality and Tourism Research: The Golden Age and Days
of Future Past. In Applying Partial Least Squares in Tourism and Hospitality Research,
edited by F. Ali, S. M. Rasoolimanesh, and C. Cobanoglu, 53–84. Bingley: Emerald.
Laszlo, C., and N. Zhexembayeva. 2017. “Embedded Sustainability.” In Embedded Sustainability,
116–40. Routledge.
Liu, G., and J. Liu. 2013. Empirical Research on the Impact of Dynamic Capability on Corporation
Performance—Base on the View of Environment Dynamics. Economy Theory Business
Management (3), 83–94. https://doi.org/10.3969/j.issn.1000-596X.2013.03.008.
Lu, X., and H. White. 2014. “Robustness Checks and Robustness Tests in Applied Economics.”
Journal of Econometrics 178: 194–206.
Luo, N., M. Zhang, and W. Liu. 2015. “The Effects of Value Co-creation Practices on Building
Harmonious Brand Community and Achieving Brand Loyalty on Social Media in China.”
Computers in Human Behavior 48: 492–9.
Luo, Y. 2000. “Dynamic Capabilities in International Expansion.” Journal of World Business 35 (4):
355–78.
Lyon, F., and H. Fernandez. 2012. “Strategies for Scaling up Social Enterprise: Lessons From Early
Years Providers.” Social Enterprise Journal 8 (1): 63–77.
McDonald, R. P. 1996. “Path Analysis With Composite Variables.” Multivariate Behavioral
Research 31 (2): 239–70.
Meng, R., X. Ning, X. Zhou, and H. Zhu. 2011. “Do ESOPs Enhance Firm Performance? Evidence From
China’s Reform Experiment.” Journal of Banking & Finance 35 (6): 1541–51.
Merz, M. A, Y. He, and S. L. Vargo. 2009. “The Evolving Brand Logic: A Service-Dominant Logic
Perspective.” Journal of the Academy of Marketing Science 37: 328–44.
Murphy, P. J., and M. R. Marvel. 2018. “The Opportunity-Based Approach to Entrepreneurial
Discovery Research.” In Current Topics in Management, 169–191. Routledge.
Nambisan, S., and R. A. Baron. 2009. “Virtual Customer Environments: Testing a Model of
Voluntary Participation in Value Co-creation Activities.” Journal of Product Innovation
Management 26: 388–406.
526 W. Li et al.

Nicolás, C., and A. Rubio. 2016. “Social Enterprise: Gender Gap and Economic Development.”
European Journal of Management and Business Economics 25 (2): 56–62.
Nunnally, J. 1978. Psychometric Methods. New York, NY: McGraw-Hill.
Payne, A. F., K. Storbacka, and P. Frow. 2008. “Managing the Co-creation of Value.” Journal of the
Academy of Marketing Science 36 (1): 83–96.
Pellicano, M., C. Tuccillo, M. Vesci, and O. Troisi. 2014. “Social Entrepreneurship and Social
Innovation Through the Lens of the Value Co-creation Process.” In Proceedings of the
International Conference of the Society for Global Business & Economic Development,
Ancona, Italy.
Porter, M. E., and C. Strategy. 1980. “Techniques for Analyzing Industries and Competitors.”
Competitive Strategy. New York, NY: Free.
Prahalad, C. K., and V. Ramaswamy. 2004. “Co-creation Experiences: The Next Practice in Value
Creation.” Journal of Interactive Marketing 18 (3): 5–14.
Rahman, M., S. Bose, M. M. Babu, B. Lal Dey, S. K. Roy, and B. Binsardi. 2019. “Value Co-creation
as a Dialectical Process: Study in Bangladesh and Indian Province of West Bengal.”
Information Systems Frontiers 21: 527–45.
Real, J. C., J. L. Roldan, and A. Leal. 2014. “From Entrepreneurial Orientation and Learning
Orientation to Business Performance: Analyzing the Mediating Role of Organizational
Learning and the Moderating Effects of Organizational Size.” British Journal of Management
25 (2): 186–208.
Rigdon, E. E., R. E Schumacker, and W. Wothke. 1998. “A Comparative Review of Interaction and
Nonlinear Modeling.” Interaction and Nonlinear Effects in Structural Equation Modeling.
Taylor & Francis, pp. 1–16.
Ringle, C. M., M. Sarstedt, and D. Straub. 2012. “A Critical Look at the Use of PLS-SEM in MIS
Quarterly.” MIS Quarterly (MISQ) 36 (1): 3–14.
Ringle, C. M., S. Wende, and J. M. Becker. 2015. “SmartPLS3”, SmartPLS, GmbH. Bönningstedt.
Retrieved from: http://www.smartpls.com.
Roh, T. H. 2016. “The Sharing Economy: Business Cases of Social Enterprises Using Collaborative
Networks.” Procedia Computer Science 91: 502–11.
Rua, O., A. França, and R. F. Ortiz. 2018. “Key Drivers of SMEs Export Performance: The Mediating
Effect of Competitive Advantage.” Journal of Knowledge Management 22 (2): 257–79.
Santos-Vijande, M. L., J. Á. López-Sánchez, and P. Pascual-Fernandez. 2018. “Co-creation With
Clients of Hotel Services: The Moderating Role of Top Management Support.” Current Issues
in Tourism 21 (3): 301–27.
Sarstedt, M., C. M. Ringle, J.-H. Cheah, Ting, H., O. I. Moisescu, and L. Radomir. 2019. Structural
Model Robustness Checks in PLS-SEM. Tourism Economics 26 (4), 531–54.
Scuotto, V., M. Del Giudice, S. Bresciani, and D. Meissner. 2017. “Knowledge-Driven Preferences
in Informal Inbound Open Innovation Modes. An Explorative View on Small to Medium
Enterprises.” Journal of Knowledge Management 21 (3): 640–55.
Sengupta, S., A. Sahay, and F. Croce. 2018. “Conceptualizing Social Entrepreneurship in the
Context of Emerging Economies: An Integrative Review of Past Research From BRIICS.”
International Entrepreneurship and Management Journal 14 (4): 771–803.
Sigala, M. 2019. “A Market Approach to Social Value Co-creation: Findings and Implications From
“Mageires” the Social Restaurant.” Marketing Theory 19 (1): 27–45.
Stevens, R., N. Moray, and J. Bruneel. 2015. “The Social and Economic Mission of Social
Enterprises: Dimensions, Measurement, Validation, and Relation.” Entrepreneurship Theory
and Practice 39 (5): 1051–82.
 Value Co-creation and Growth of Social Enterprises 527

Stone, M. 1974. “Cross‐Validatory Choice and Assessment of Statistical Predictions.” Journal of

the Royal Statistical Society: Series B (Methodological) 36 (2): 111–33.
Sugathan, P., K. R. Ranjan, and A. G. Mulky. 2017. “Atypical Shifts Post-Failure: Influence of Co-
Creation on Attribution and Future Motivation to Co-create.” Journal of Interactive Marketing
38: 64–81.
Sun, S. L., and I. Junyon. 2015. “Cutting Microfinance Interest Rates: An Opportunity Co–creation
Perspective.” Entrepreneurship Theory and Practice 39 (1): 101–28.
Sunley, P., and S. Pinch. 2012. “Financing Social Enterprise: Social Bricolage or Evolutionary
Entrepreneurialism?” Social Enterprise Journal 8 (2): 108–22.
Taghizadeh, S. K., K. Jayaraman, I. Ismail, and S. A. Rahman. 2016. “Scale Development and
Validation for DART Model of Value Co-creation Process on Innovation Strategy.” Journal of
Business & Industrial Marketing 31 (1): 24–35.
Tajvidi, M., Wang, Y., N. Hajli, and P. E. D. Love. 2017. Brand Value Co-creation in Social Commerce:
The Role of Interactivity, Social Support, and Relationship Quality. Computers in Human
Behavior. https://doi.org/10.1016/j.chb.2017.11.006. In press.
Teece, D. J. 2018. “Business Models and Dynamic Capabilities.” Long Range Planning 51 (1): 40–9.
Thomas, A. 2004. “The Rise of Social Cooperatives in Italy.” Voluntas: International Journal of
Voluntary and Nonprofit Organizations 15 (3): 243–63.
Tian, Y., Y. Wang, , X. Xie, J. Jiao, and H. Jiao. 2019. “The Impact of Business-Government Relations
on Firms’ Innovation: Evidence From Chinese Manufacturing Industry.” Technological
Forecasting and Social Change 143: 1–8.
Tiwana, A., BennK., and A. A. Bush. 2010. “Research Commentary—Platform Evolution:
Coevolution of Platform Architecture, Governance, and Environmental Dynamics.”
Information Systems Research 21 (4): 675–87.
Truong, A., and J. Barraket. 2018. “Engaging Workers in Resource-Poor Environments: The Case of
Social Enterprise in Vietnam.” The International Journal of Human Resource Management 29
(20): 2949–70.
Umrani, W. A., K. M. Kura, and U. Ahmed. 2018. “Corporate Entrepreneurship and Business
Performance.” PSU Research Review 2 (1): 59–80.
Vanhala, M., and P. Ritala. 2016. “HRM Practices, Impersonal Trust and Organizational
Innovativeness.” Journal of Managerial Psychology 31 (1): 95–109.
Vargo, S. L., and R. F. Lusch. 2014. “Evolving to a New Dominant Logic for Marketing.” In The
Service-Dominant Logic of Marketing, 21–46. Routledge.
Venkataraman, S., 1997. Value at Risk for a mixture of Normal Distributions: The Use of Quasi-
Bayesian Estimation Techniques. Economic Perspectives-Federal Reserve Bank of Chicago 21
(1997), 2–13.
Veronica, S., Shlomo, T., M. Petruzzelli Antonio, and V. Chang. 2019. International Social SMEs in
Emerging Countries: Do Governments Support Their International Growth? Journal of World
Business. https://doi.org/10.1016/j.jwb.2019.05.002. In press.
Vershinina, N., K. W. Beta, and W. Murithi. 2018. “How Does National Culture Enable or Constrain
Entrepreneurship? Exploring the Role of Harambee in Kenya.” Journal of Small Business and
Enterprise Development 25 (4): 687–704.
Yi, Y., and T. Gong. 2013. “Customer Value Co-creation Behavior: Scale Development and
Validation.” Journal of Business Research 66 (9): 1279–84.
Yoon, S., and E.-M. Lee. 2019. “Social and Psychological Determinants of Value Co-creation
Behavior for South Korean Firms: A Consumer-Centric Perspective.” Asia Pacific Journal of
Marketing and Logistics 31 (1): 14–36.
528 W. Li et al.

Yu, X. 2011. “Social Enterprise in China: Driving Forces, Development Patterns and Legal
Framework.” Social Enterprise Journal 7 (1): 9–32.
Yu, X., 2013. The Governance of Social Enterprises in China. Social Enterprise Journal 9 (3),
225–46.
Zadek, S., M. Burns, and M. Forstater. 1997. Open Trading. London:Product: New Economics
Foundation.
Zhang, X., Ye, C., Chen, R., Wang, Z., 2011. “Multi-focused strategy in value co-creation with
customers: Examining cumulative development pattern with new capabilities.” International
Journal of Production Economics 132 (1): 122–130.
Zhao, L. M., S. Zahra, and G. U. Qing-Liang. 2014. “Analysis of International Social
Entrepreneurship Research Frontier: A Contextualization Perspective.” Foreign Economics
and Management 36 (5): 12–22.
Copyright of Entrepreneurship Research Journal is the property of De Gruyter and its content
may not be copied or emailed to multiple sites or posted to a listserv without the copyright
holder's express written permission. However, users may print, download, or email articles for
individual use.