Social Entrepreneurs’ Perceptions of the Institutional Environment: The Influence of Human and Psychological Capital

Abstract

This research explores individual-level factors that influence social entrepreneurs’ perceptions of the institutional environment and examines why some individuals pursue, and persevere in, the social entrepreneurship field. Based on qualitative interviews with social entrepreneurs in Saudi Arabia, we find that human capital—represented by education and professional experience—influences the perception of regulative institutions, but can create a mismatch between expectations and reality. The four psychological capital components affect social entrepreneurs’ perceptions of regulative institutions at different stages of the venture. Self-efficacy and optimism are useful at the beginning of the social entrepreneur’s journey, whereas hope and resilience are more important for the viability of social enterprise at later stages.