Pro‐market Institutions and the Degree of Hybridity in Startup Social Ventures: The Moderating Effects of Organizational Activities

Abstract As a departure from previous research that takes social ventures as a distinct organizational type, this study investigates the relationship between the pro‐market institutions in a country and the degree of hybridity in social ventures, focusing on the dimension of organizational goals. Additionally, it examines the contingent effects of organizational activities, such as the novelty of market offering and the implementation of social performance measurement. Combining Global Entrepreneurship Monitor data in 2009 and 2015 with other cross‐national databases, we test our theoretical predictions using 3648 startup social ventures across 42 countries. We find that pro‐market institutions have an inverted U‐shaped effect on the degree of hybridity in social ventures. Furthermore, the novelty of market offering and social performance measurement attenuate the impact of pro‐market institutions on organizational hybridity by shifting the inverted U‐shape to relatively negative and linear. Through this cross‐level empirical exploration, we develop a richer explanation of organizational hybridity and contribute to the growing literature on social ventures and hybrid organizations.