IT and the Dual Bottom-Line Objective of Rational Social Enterprises

This study explores the impact of a digital shift on the dual bottom-line performance objectives of rational social enterprises, focusing on a Microfinance Institution as an exemplar. We examine how the shift influences social and business outcomes and investigate the moderating effects of the presence of social and for-profit enterprises, along with surrounding economic opportunities. We construct a novel dataset from over 6000 loans. We augment this dataset with geospatial information on bank branch statistics. Our analysis involves a generalized difference-in-differences model. Our results reveal a negative impact of the digital shift on social outcomes but a positive effect on business outcomes. Social enterprises and for-profit enterprises moderate these effects and surrounding economic opportunities affect moderating relationships for business objectives but not for social objectives. The study contributes to understanding the nuanced relationship between digitalization, social impact, and financial sustainability in rational social enterprises, especially in developing country contexts.