Impact Investment Readiness and Social Venture Growth: The Roles of Organizational Legitimacy and Stakeholder Trust
Keywords:
Impact Investment Readiness, Organizational Legitimacy, Stakeholder Trust, Social Enterprise Growth, Social EntrepreneurshipAbstract
Social enterprises play a critical role in addressing social and environmental challenges while pursuing sustainable economic activities. However, achieving long-term growth often requires access to impact-oriented investments and strong stakeholder support. This study examines the effect of impact investment readiness on social enterprise growth in Indonesia, with organizational legitimacy and stakeholder trust serving as mediating variables. A quantitative research approach was employed using survey data collected from 145 founders, managers, and executives of social enterprises operating across Indonesia. Data were measured using a five-point Likert scale and analyzed through Structural Equation Modeling–Partial Least Squares (SEM-PLS 3). The results reveal that impact investment readiness significantly and positively influences organizational legitimacy and stakeholder trust. Furthermore, organizational legitimacy) and stakeholder trust significantly enhance social enterprise growth. The mediation analysis demonstrates that organizational legitimacy and stakeholder trust partially mediate the relationship between impact investment readiness and social enterprise growth. The model explains 65.8% of the variance in social enterprise growth, indicating substantial predictive power. The findings suggest that social enterprises with stronger investment readiness are more capable of building legitimacy and fostering stakeholder confidence, which subsequently supports organizational expansion and social impact creation. This study contributes to the literature on social entrepreneurship and impact investing by providing empirical evidence from Indonesia and offers practical insights for social enterprise managers, investors, and policymakers seeking to strengthen organizational growth through improved investment preparedness, legitimacy, and stakeholder relationships.
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