Forging a Local Social Economy: On the Institutional Work of Local Governments in South Korea

Abstract This study investigates the strategies local governments can employ to stimulate the growth of the local social economy sector—a sector associated with improving residents’ subjective well-being. Acknowledging the under-explored but potentially pivotal role of local government as a catalyst, our research uses an institutionalist lens—focusing on institutional work, support, and public-sector entrepreneurship—to examine how local governments can encourage the establishment of social economy organizations. We adopt a Partial Least Squares Model-Structural Equation Modeling approach to analyze data from 69 South Korean urban metropolitan local governments between 2018 and 2020. Our findings reveal a significant positive relationship between the regulatory, administrative, and intermediary support mechanisms implemented by local governments and the scale of the local social economy. By integrating public-sector entrepreneurship with institutional perspectives, our findings enrich existing literature and provide insight into the strategic initiatives local governments can adopt to foster social entrepreneurship.