The Role of Hybrid Organizations in Scaling Social Innovations in Bottom‐of‐the‐Pyramid Markets: Insights from Microfinance in India

While social innovations that solve financial exclusion have gained increasing attention as a means of helping the poor in developing markets, little research has empirically investigated the types of organizations that drive these innovations to achieve scale. Hybrids, a type of organization that exist in between traditional organizational forms, are said to have rapidly gained prevalence, especially in bottom‐of‐the‐pyramid markets. Some scholars claim that hybrids are largely responsible for the spread of established social innovations, yet hybrids do not constitute a homogenous group; instead each hybrid form exists on a spectrum between pure for‐profit and not‐for‐profit organizational forms. It is important that empirical research investigates the role that various hybrid forms play in scaling established social innovations, especially under various bottom‐of‐the‐pyramid market conditions. To this end, using two market‐level outcome measures of scale achieved (prevalence and usage), the authors pursue two research objectives: to study (1) the extent to which, alternative hybrid forms (not‐for‐profit, quasi‐profit, and for‐profit hybrids) drive social innovation; and (2) the relative propensity of these hybrid forms to drive social innovation under varying bottom‐of‐the‐pyramid market conditions, specifically varying levels of development and social diversity. By theorizing how different organizational forms act given their degree of hybridity, the authors develop and test six hypotheses using data sets on microfinance organizations in India. Accordingly, they find that (1) compared with not‐for‐profit and for‐profit hybrids, quasi‐profit hybrids have a propensity to become more prevalent and achieve greater usage in bottom‐of‐the‐pyramid markets overall. Yet, within the spectrum of hybrid forms, (2) not‐for‐profit hybrids are more likely to become more prevalent and achieve greater usage in markets with lower development levels, whereas (3) for‐profit hybrids are more likely to become more prevalent and achieve greater usage in markets with lower social diversity when compared with other hybrid forms.     

RESPONSE OF STOCK PRICES TO MONEY SUPPLY ANNOUNCEMENTS: AUSTRALIAN EVIDENCE

This paper extends the literature on the money supply announcement effect by examining the response of stock prices to the monthly announcements of the money supply made in Australia. The unexpected component of the money supply change is identified using both a market based survey of expectations and rolling ARIMA time series models. The analysis is further extended to examine the impact of the money supply announcements during the period of monetary target-ting; the cross-sectional impact of the announcements across various stock price indices and the pre- and post-announcement responses of stock prices. The results documented show no evidence of a significant stock price response to the money supply announcements in Australia.