Social sustainability: Viability analysis of social firms

Abstract

Social enterprises are firms that actively create jobs for people with disabilities and reduce social and labour inequalities, thereby participating in the social economy. Due to their importance to society and the work they do towards diversity integration and social sustainability, they have recently attracted much attention in academic literature. For this reason, the main objective of this study was to analyse the survival of social enterprises, identifying key variables that condition their continuity in the market or their failure. The initial sample consisted of 999 social enterprises for the year 2022. The Altman Z-score and artificial intelligence (AI) algorithms were used to obtain the basic survival patterns. The main findings were that, on average, social enterprises are highly experienced companies and only one-third of them are at risk of bankruptcy. This means that most of these enterprises can continue their social function. Moreover, the results of return on assets (ROA), equity and debt turnover can predict being at risk of bankruptcy of social enterprises. This study contributes to the scarce academic literature on social enterprises and promotes the existence of such enterprises for social and economic sustainability.