Abstract

We analyze selection criteria used by social investors in order to evaluate the integrity of social entrepreneurs applying for funding. From a theoretical point of view, three different perspectives may be relevant for the perception of the social investor. First, social investors may focus on the social motivation of the entrepreneur as an indicator for the long term pursuit of the social mission. Second, reputation is another criterion which refers to stakeholders’ evaluation and is based on information about past actions and performance. Third, corporate governance structures such as the presence of other external investors in the board lead to monitoring of the social entrepreneur and may act as a positive signal for the integrity of the entrepreneur.

We analyze how these selection criteria separately and jointly drive the perception of the integrity of the social entrepreneur. Our paper thereby contributes to the understanding of factors influencing the external portrayal of integrity.

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