Cultural Values and Social Entrepreneurship: A Cross-Country Efficiency Analysis

The social context exerts an influence on the individuals’ perception and, thus, on start-up decisions. The prevalence of entrepreneurial behaviors differs widely between countries. Economic variables alone are not enough to explain these differences. In this sense, culture seems to play a relevant role in the entrepreneurial process. Cultural diversity may influence the prevalent characteristics of entrepreneurial initiative and thus moderate the effect of economic conditions on entrepreneurship. Social entrepreneurship has attracted the interest of researchers due to two main reasons. Firstly, it has a complementarity role in the profit maximizing capitalist system. Secondly, governments are playing an increasingly weaker role in addressing social goals within the context of the most recent socioeconomic crisis. Nevertheless, the creation of social ventures does not only depend on the existence of an enabling legal system. What additional factors make citizens aware and willing to start these social ventures vs. the traditional market-based firms? Understanding the specific contextual features that promote the emergence of social enterprises represents an important step forward. In particular, the question of which specific cultural characteristics are more favorable to the development of social entrepreneurship initiatives which may contribute to solve social problems is, therefore, of interest. Thus, the aim of this chapter is to analyze the complex interaction between cultural values and social entrepreneurship in countries with different income levels. In particular, it investigates the existence of an “efficient” combination of cultural values that maximizes the social entrepreneurship levels in the country. This will also provide information on how other countries can achieve it. For this analysis, we have used two international data sets. On the one hand, the Schwartz Value Survey (SVS) measures national cultural orientations. On the other hand, the Global Entrepreneurship Monitor (GEM) provides data on social entrepreneurship activity. The selection of countries was made based on the available data (31 efficiency- and innovation-driven countries participating in both datasets). Empirical analysis consists on an output-oriented data envelopment analysis (DEA) where the inputs are different cultural dimensions and the output is Early-Stage Social Entrepreneurial Activity (SEA). The results show two efficient cultural models. First, the Latino American model headed by Argentina, characterized by a strong presence of egalitarianism. Secondly, the North American model, with the USA being characterized by the prevalence of mastery and autonomy values. One implication derived from this research is that entrepreneurship policies should take into account the characteristics of the culture in which they will be implemented and the cultural value priorities to be reinforced and/or modified. This analysis opens new lines of research into the effect of culture on social entrepreneurship. It also points to the feasibility of measuring the impact of culture on the levels of social entrepreneurship based on the notion of “efficient culture.”