Social sustainability: Viability analysis of social firms

Abstract

Social enterprises are firms that actively create jobs for people with disabilitiesand reduce social and labour inequalities, thereby participating in the socialeconomy. Due to their importance to society and the work they do towards diver-sity integration and social sustainability, they have recently attracted much atten-tion in academic literature. For this reason, the main objective of this study wasto analyse the survival of social enterprises, identifying key variables that condi-tion their continuity in the market or their failure. The initial sample consisted of999 social enterprises for the year 2022. The Altman Z-score and artificial intel-ligence (AI) algorithms were used to obtain the basic survival patterns. The mainfindings were that, on average, social enterprises are highly experienced compa-nies and only one-third of them are at risk of bankruptcy. This means that mostof these enterprises can continue their social function. Moreover, the results ofreturn on assets (ROA), equity and debt turnover can predict being at risk ofbankruptcy of social enterprises. This study contributes to the scarce academicliterature on social enterprises and promotes the existence of such enterprisesfor social and economic sustainability.