This paper takes a question-driven approach to examine the distinctive strategic choices of for-profit firms in markets for social services, and their connection to long-term firm outcomes. We exploit a legislation that allowed for-profit firms to operate in Brazilian higher education, a market previously reserved for non-profit firms. Combining quantitative analysis and qualitative interviews, we find that the entry-stage strategies of for-profit firms differ from those of non-profits, involving distinctive choices about firm scale and scope, product-market mix, and resource management. These strategic choices and being for-profit are positively associated with firm survival and size. Our research highlights how for-profit firms are different from non-profits in the needs they serve and productive efficiencies they access, and how they contribute to expanding access to social services.
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Inoue et al. (2024) studied this question.
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