Economic Perspectives of Municipal Social Enterprises in Slovakia: What Makes Them Different? A Comparative Study

Social entrepreneurship has massive support in the European Union. In Slovak conditions, it is a relatively new concept with a legal framework stipulated only in 2018, and it has still not been thoroughly examined. Currently, one-quarter of social enterprises in Slovakia are established by the municipalities, promoting the positive impact of municipal social entrepreneurship on a broader area of activities in a locality or region. This paper contributes to filling the research gap in the field of Slovak social entrepreneurship by focusing on the unexplored field of municipal social enterprises in comparison to those of privately owned running three sub-analyses from the point of view of economic activity, economic performance, and socioeconomic and demographic factors determining the establishment of municipal social enterprises. We work with a sample of Slovak social enterprises established since 2018. Our results point to different economic activities of municipal social enterprises compared to those of privately owned ones. While private social enterprises focus on economic activities related to associations and movements for adults, municipal ones focus on landscape management. When considering economic performance using financial analysis indicators, municipal social enterprises perform better than private ones. Finally, results indicate that the municipality’s population size is the factor with the highest relative importance when establishing the municipal social enterprise. This paper provides policymakers and local elected authorities with encouraging insights into municipal social enterprises established in larger municipalities to help improve the local environment. Moreover, their economic results are competitive with those of private social enterprises.