Effects of societal culture and institutions on the cultivation of country-based social entrepreneurship activity

Abstract

As the prevalence of social problems such as climate crisis, unequal distribution of wealth, poverty increase, the severity, and consequences of these problems require more attention. These social problems have started to undermine the current economic systems and the traditional way of doing business. As a result, giving priority to value creation rather than value capture perspective has increased in importance. With this change, social entrepreneurship has become a critical subject and got the attention of many scholars, the private sector, and even the governments. Social entrepreneurship has a different motive compared to other entrepreneurship types, serving society rather than profit maximization. Therefore, social entrepreneurs focus on reaching self-actualization through serving society.Some research on the subject found that developed country markets host more social businesses in the world. Accordingly, it is likely that country development level is an effective factor for promoting social entrepreneurs. However, the country's development level is not enough to achieve more social entrepreneurship. In line with previous research, societal culture also functions as another factor on social entrepreneurs' activities. The extent research on societal culture display the fact that countries posses different cultural norms and values which impact their members' preferences and behaviors. In this respect, it is likely that societal cultural values and norms affect prosocial behaviors. Further, societal cultural norms may also have an impact on the economic behavior of the members of the society and so they may shape formal institutions such as regulatory frameworks and societal operating mechanisms. That is why, societal culture acts as one of the factors that designates whether the context is suitable or not for social entrepreneurship. Within the scope of this research the relationship between societal culture, prosocial behavior, country-based institutions, and the extent of social entrepreneurship activity within a country are examined at country-level in order to explore how these constructs relate to each other; and so how they influence country-based entrepreneurship activity. In this study, societal culture as a source of variation between nations was investigated across countries to explore how it, combined with the institutional effects, influences the social entrepreneurship activity of countries. For this aim, the data of the study for 38 countries are gathered from the secondary sources, which are published by international organizations as annual global reports. In this research, the measurement scales which are used and accepted by extent research are utilized for the constructs of social entrepreneurship, prosocial behavior, formal institutions, and societal culture. The country-level data used in this research was gathered from the secondary data sources which are commonly accepted and used many times in the academic literature. For societal cultural dimensions and the related country scores the GLOBE project data was utilized. For the data for social entrepreneurship activity of countries the data from Global Entrepreneurship Monitor report was used. For the data of contry-based prosocial behavior, the data from the Charities Aid Foundation World Giving Index report was utilized. Regarding the data for the country-based formal institutional effects, the data from the World Bank database were used within the current studies' analyzes. The dataset gathered from these secondary data sources was first analyzed for possible errors and missing values by data screening. Afterwards, a confirmatory factor analysis was conducted to verify the structure of the model. Next, the validity and reliability tests were conducted to measure the consistency and accuracy of our research. By using the PROCESS macro in SPSS, the mediation and the moderated mediation analyzes were conducted via the bootstrapping method. The research results have shown that the prosocial behavior of citizens does indeed play a mediator role between societal culture and social entrepreneurship level of countries, making prosocial behavior an important factor to be considered in "societal culture"-"social entrepreneurship" mechanism. Only the cultural dimensions of Assertiveness and Institutional collectivism practices have no significant interaction with prosocial behaviors in this research. In addition, the moderator effects of formal institutions through prosocial behaviors have also been examined in the scope of this research. Five moderators were grouped into three categories as governmental, economic, and social development levels. The results have shown that the governmental, economic, and social development levels of countries have moderator roles on the impact of countries' social entrepreneurship activities through prosocial behaviors, as this study model suggests. However, it is found that the moderator effects of each development level differ for each cultural dimension. Another finding was that none of the country development levels mentioned above had any moderator effect for the cultural dimensions of Gender Egalitarianism and Performance Orientation. These results show that there are statistically significant interactions between some cultural dimensions, prosocial behaviors, and social entrepreneurship activities at country level. In this respect, governments can predict the change of social entrepreneurship activities in their own countries by considering how these concepts affect each other, as revealed in this study, in their efforts to support social entrepreneurship, and they can use this perspective to develop interventions to support country-based social entrepreneurship activities.