Demand and Supply Side View on the Factors Affecting Size of Non-Profit Economy

Abstract

This paper empirically investigates various factors a¤ ecting variations in the size of the non-pro…t sector by using cross-country data in the sample of selected countries. Namely, the available data on sector employment (workforce) indicate substantial variations in the size of the sector among countries, although certain problems exist with the measurement of the sector size, whicha are mostly related to its diversity. The existing literature can provide several theories, hypotheses and concepts that could potentially help to explain those di¤ erences; the outcome of those approaches is the extrapolation of various demand and supply side factors that a¤ ect crosscountry di¤ erences in the size of the sector. The exploratory approach taken in the paper is focused on combining the e¤ ect of those factors for the purpose of their empirical veri…cation. The results indicate that supply side factors tend to be more important in explaining di¤ erences in the size of the sector among countries.