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Cristian Geldes, Jorge Heredia, Alejandro Flores, Jorge Peña y Walter Heredia

Perspectives of Business Model for Social Innovation in Emerging Economies

The present study consists of the need to understand the social innovation strategies of companies in emerging economies. Our study is relevant at a theoretical level since there is little research on the subject; and at a practical level, allowing us to understand the reality of companies that adopt social innovation, despite the problems inherent to emerging economies. In this context, innovation emerges as a strategy to improve their performance and sustainability. With a commitment to sustainable social development, we can understand social innovation as a strategy adopted by companies to improve their quality of life. Therefore, our study addresses the following questions: a) What internal and external factors determine social innovation in firms? b) Is public funding a factor that incentivizes social innovation? c) Are technological or non-technological innovations necessary for developing social innovation? d) How does affect the informality of formal firms affect social innovation? e) What is the effect of young innovative firms on social innovation? To understand the new model of social innovation, we use the theoretical framework of the strategy tripod applied in emerging economies (Heredia et al., 2019). This analysis identifies the main components of social innovation from three different but complementary perspectives: firm resources (Barney, 1991), industrial (Porter, 1980), and institutional (Peng et al., 2008). We employed the Fuzzy Set Qualitative Comparative (FsQCA) approach to analyze multiple causalities in the methodology. It identifies which combinations are necessary and sufficient to lead to the outcome (Ragin, 2008). We study companies in Chile as an emerging economy. The database we used belongs to the "Tenth Survey of Innovation in Companies" published in 2018. The results correspond to 131 companies incorporating social innovation; the expansion factor was used, allowing us to expand the survey to 1707 companies. We consider marketing innovation, firm age, human capital, and cooperation as firm resources. At the industry level, we use market concentration and informality at the organizational level. Finally, at the institutional level, public funding and bureaucratic barriers are used. The outcomes that lead to higher adoption of social innovation are: (i) First, if a young firm perceives the absence of public funding, it will cooperate with other firms to realize high social innovation. (ii) Second, if young firms sense the absence of public funding and cooperation simultaneously, a high level of human capital will be necessary to realize a high level of social innovation. In both configurations (i) and (ii), the role of marketing innovation allows us to determine how fundamental they are for young firms. (iii) Third, if a young firm accesses public funding, it enables a high level of social innovation. As for young companies, they are the ones that allocate more resources and strategies to employ social innovation, despite the obstacles of an emerging economy. The research development consists of the literature review, followed by the beginning of the estimations, and finally, with the elaboration of the research using a qualitative methodology (FsQCA).