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The countervailing effects of spatial competition in the performing arts: examining local versus traded market performance

Author

Listed:
  • Richard Briesch

    (Southern Methodist University)

  • Ernan Haruvy

    (McGill University)

  • Glenn B. Voss

    (Southern Methodist University)

  • Zannie Giraud Voss

    (Southern Methodist University
    Southern Methodist University)

Abstract

Intense competitive pressure in a local geographic market may diminish an organization’s revenues in that market but increase its innovation output and revenue opportunities in other geographic markets. This trade-off between local and traded market performance determines an organization’s combined revenues; yet, it has not been conceptually articulated or empirically examined at the organization level. Using data from the performing arts sector, we isolate the differential effects of local competition on local and traded market revenue. The results offer compelling evidence that competitive density in the local market has a negative effect on local market performance but a positive effect on innovation and traded market performance. The implication is that organizations can overcome the negative effects of local competition through innovation and through the exploration of opportunities for traded revenues. We further find that smaller organizations are more likely to innovate in response to competitive density, but that they lack the resources and capabilities required to translate innovation into increased revenues.

Suggested Citation

  • Richard Briesch & Ernan Haruvy & Glenn B. Voss & Zannie Giraud Voss, 2024. "The countervailing effects of spatial competition in the performing arts: examining local versus traded market performance," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 48(4), pages 527-574, December.
    • Handle: RePEc:kap:jculte:v:48:y:2024:i:4:d:10.1007_s10824-024-09510-4
    DOI: 10.1007/s10824-024-09510-4
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    More about this item

    Keywords

    Spatial competition; Competitive density; Breakthrough innovation; Performing arts; Nonprofit organizations;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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