It Takes a Village to Sustain a Village: A Social Identity Perspective on Successful Community-Based Enterprise Creation

Abstract

This article examines the powerful yet overlooked role of community-based enterprises (CBEs)—enterprises that are collectively established, owned, and controlled by the members of a local community, for which they aim to generate economic, social, and/or ecological benefits—in addressing a broad range of problems facing many rural communities around the globe. To understand why and how CBEs successfully come into existence, we conduct an exploratory case study of two community-based pubs founded in rural Bavaria, Germany, in the 2010s. Using abductive data analysis, we uncover several collective identity mechanisms that spur community mobilization and entrepreneurial action. Specifically, we find that, whereas an incumbent collective village identity lays the ground for successful CBE creation, an emergent enterprising community identity is critical to go beyond venture inception. Through identification with the entrepreneurial project, supporters develop a lasting commitment to it—reinforced over time through artifacts, rituals, and celebrations—which further feeds and sustains its implementation. Our study paves the way for future research on entrepreneurship, collective action, and identity in local communities.