Diversity, Trust and Social Entrepreneurship

Social entrepreneurship (SE) differs from conventional entrepreneurship insofar as it emphasizes social outcomes ahead of economic returns. Research on the institutional effects on the former, however, has neglected to address specifically the impact of diversity, although it has been extensively studied in relation to the latter. This paper examines the effects of ethnic and religious heterogeneity, and trust as a moderator, on SE in 22 countries. The results suggest that an increase in ethnic diversity within countries leads to a higher engagement in SE. Also it is found that inter-religious trust attenuates the negative relationship between religious diversity and SE.