Nascent Cultural and Creative Entrepreneurship: Between Entrepreneurial Economics and Institutional Entrepreneurship

Nascent Cultural and Creative Entrepreneurship: Between Entrepreneurial Economics and Institutional Entrepreneurship

Marilena Vecco (Erasmus University Rotterdam, The Netherlands) and Andrej Srakar (Institute for Economic Research, Slovenia & University of Ljubljana, Slovenia)
Copyright: © 2018 |Pages: 28
DOI: 10.4018/978-1-5225-2936-1.ch008
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Abstract

Despite the topic of Nascent Entrepreneurship (NE) receiving quite extent in coverage in the scientific literature there is very few, if any, knowledge on the characteristics of nascent firms in the cultural and creative sector. Using 10 years of data (2006-2015) collected in Amadeus from a selected sample of European countries, the authors highlight the variations in the measurement of NE in the cultural and creative sectors across time and geographic context. The authors test the influence of a set of formal institutions on NE in the cultural and creative sectors. In particular, the authors find evidence on their effects on the performance of NE in the cultural and creative sectors, but evidence that sometimes institutional quality and general development can have opposite effects on the performance of NE in the cultural and creative sectors. The chapter concludes by reflections and research recommendations.
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Introduction

During the last decades, the cultural market has extremely changed. Events such as political and economic changes, deregulation (Garnham, 2005) globalization (Crane, 2010; Slavich, & Montanari, 2005) and the financial crisis (Bonet, & Donato, 2011) have highly affected it. This changing context is characterized by the emergence of concepts such “entrepreneurial individual” and the “enterprising society” (Fayolle, & Redford, 2014).

As entrepreneurial success depends on different characteristics of societies (Ellmeier, 2003), it is of high importance to understand how the civic society models facilitate or hinder nascent entrepreneurship (NE). Moreover, Søndergaard (2011) affirmed that there is a need to understand the dynamics of the relations between different cultural landscapes as well. In this chapter, the focus will be on the concept of cultural1 nascent entrepreneurship (NE) in Europe.

This chapter aims to understand the implications of the sets of formal institutions on the varieties of entrepreneurship within the cultural sectors. Secondly, it identifies the demographic characteristics, most influencing the success of nascent entrepreneurship in these sectors. The analysis is developed over time and based on tracking some specific causal effects between the existing society models, on one hand, and the nascent cultural entrepreneurship varieties, on the other.

Entrepreneurial opportunities, styles and activities differ significantly across societies. These differences are one important factor in affecting the levels of wealth and prosperity across societies and countries (van Praag, & Versloot, 2007). On one hand, the authors can explain this variety with cultural argumentations (Harrison, 2006) but on the other, the literature on institutions in economics provides an alternative explanation, which focuses on the institutional context in which entrepreneurs act. The institutional alternative is characterized by a broader approach that embodies not only culture, or “informal institutions”, but also formal institutions as well (Shirley 2005, 2008). The institutional context in which entrepreneurs act, shapes and constrains the opportunities available at any point in time (Boettke, & Coyne, 2008). In this institutional context – characterised by some specific policies and incentives – (may provide a net benefit to productive opportunities, e.g., arbitrage and innovation), entrepreneurs will exploit those opportunities resulting in the creation of wealth. Institutions provide the general rules of the game, which facilitate economic, social, and political interactions. Some specific institutional determinants and policy measures may strongly contribute to an environment that discourages NE, entrepreneurial activity and economic growth. Productive entrepreneurship (Baumol, 1990) may be considered as an essential explanatory factor of the economic performance of a country. According to Davidsson and Henrekson (2001), a vibrant entrepreneurial culture may be identified with (i) a high rate of firm formation and a high prevalence of nascent entrepreneurs, and (ii) that the most viable commercial ideas are translated into a sizable number of high-growth firms.

This analysis will refer to a detailed NACE classification, to discern the firms, working in cultural occupations in a selected sample of 13 European countries2 (United Kingdom, Sweden, Slovenia, Slovakia, Poland, Lithuania, Latvia, Italy, Hungary, Germany, France, Estonia, and Czech Republic). It will use the database of Amadeus, which is a database of comparable financial information for public and private companies across Europe. It includes comprehensive information on around 21 million companies across Europe.

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