Introduction

A growing body of entrepreneurship research has acknowledged that it is important to delve into entrepreneurial success beyond firm performance and entrepreneurs’ financial gratification (e.g. Ezzedeen and Zikic 2015; del Mar Salinas-Jiménez et al. 2010; Wach et al. 2016). For example, Wach et al. (2016) argued that monetary rewards and related economic indicators of firm performance does not fully capture the essences of entrepreneurial success. Prior work has shown that entrepreneurs with different goals, motives and professional attitudes may construe and judge career success very differently (Turkina and Thai 2015). Similarly, the disparity of cultural, social, or industrial context is likely to result in the different standards for evaluating entrepreneurial career success (Lau et al. 2007). Because of its dynamic nature and multi-dimensionality, entrepreneurial success has been defined as the start-up founders’ subjective assessment of (1) pleasant career experience (Lau et al. 2007); (2) the fulfillment of the career goals that are personally important to the entrepreneur (Wach et al. 2016); and (3) perceived life quality after founding the new venture (Parasuraman and Simmers 2001). However, the achievement and acceptance of such criteria are neither sufficiently researched nor included in entrepreneurship education (Gorgievski et al. 2011), indicating a major theoretical gap in the area of small business and entrepreneurship.

Entrepreneurship can be a rewarding yet stressful journey, as entrepreneurial tasks are associated with risk, income uncertainty, intense work effort, and long working hours (Uy et al. 2013). One of the important topics in the recent entrepreneurship literature is entrepreneurial happiness, which embodies the pleasant emotions, well-being, and positive attitudes perceived by entrepreneurs during the process of venture creation (Carree and Verheul 2012). Research has highlighted the importance of happiness to entrepreneurs’ stress handling (Uy et al. 2013) and the perseverance in running the new venture (Van Praag and Versloot 2007). Although happiness has been commonly recognized as the driving force behind career success of entrepreneurs, surprisingly little empirical research has explored the antecedent of entrepreneurial happiness (Carree and Verheul 2012; Fisher 2010).

Creative industries are characterized largely by the labor inputs of creative individuals and include a variety of businesses, such as advertising, architecture, design, software, filming, TV production, music, photography, publishing and performing arts (NOIE 2003). Most businesses in creative industries are small and at their nascent stages, and the unique entrepreneurial behavior of creative entrepreneurship increasingly attracts the scholarly attention in the past decade (Henry and De Bruin 2011). Indeed, a growing number of studies have been done to shed light on entrepreneurship in creative industries (Chen et al. 2017; Konrad 2013; Paek and Lee 2017). However, as an emerging sector of small businesses, creative industries have been reported to suffer from high failure rates of venture creation (Chen et al. 2017). Happiness, therefore, represents a critical mental state underpinning creative entrepreneurs’ determination and perseverance in sustaining the new venture. On the basis of entrepreneurial cognition theory, Chaston and Sadler-Smith (2012) argue that most creative entrepreneurs possess the attributes distinct from general entrepreneurs and inherit the creative personality from their former career as designer, artist, craftsman, etc. One essential motivation for creative individuals to embark upon entrepreneurial career is that new venture creation allows them to actualize their ingenuity and to embrace novelty and originality at work (Chaston and Sadler-Smith 2012; Ellmeier 2003). Therefore, the determinants of creative entrepreneurs’ happiness are likely to result from individual creativity of entrepreneurs and firm creativity of new creative ventures.

For a better understanding of how creativity affects happiness perceived by creative entrepreneurs, it is important to explore what antecedents may stimulate both individual creativity and firm creativity. In the existing literature, cognitive psychology and social theory of creativity are the two prevalent theoretical streams extensively used to explain creativity at work (Armstrong et al. 2012; Chen et al. 2015a). According to entrepreneurial cognition theory, the unique form of knowledge structure possessed by entrepreneurs determines their ability to make assessments, judgments or decisions involving opportunity recognition, venture creation and growth (Mitchell et al. 2002; Mitchell et al. 2007). Drawing upon the perspective of entrepreneurial cognition, cognitive style of start-up founders has been extensively employed to examine how entrepreneurs think, behavior, generate ideas, and respond to external dynamics (Mitchell et al. 2002). Cognitive styles refer to consistent individual differences in how individuals perceive, think, solve problems, learn, and take decisions (Witkin et al. 1977). Creativity is at the heart of the entrepreneurial activities in creative industries (Throsby 2008), and it has long been suggested that cognitive style plays a critical role in determining creativity at work (Amabile 1996).

To investigate how creative entrepreneurs’ cognitive style impacts their creativity from intrinsic side, we adopt the Cognitive Style Indicator (CoSI) developed by Cools and Van den Broeck (2007), which is a three-dimensional construct consisting of knowing style, creating style, and planning style. The CoSI was developed and used to reveal which elements of mental model an individual is interested in and feels confident of the most (Cools and Van den Broeck 2007). Research in entrepreneurial cognition is about exploring how entrepreneurs use simplifying mental models to integrate previously unconnected information that helps produce creative ideas and identify market opportunities (Mitchell et al. 2002). Since the CoSI covers explicit facets of an individual’s intellectual activities, using it as a theoretical lens can help understand the cognition of creative entrepreneurs in the process of idea generation.

From extrinsic side, research has suggested that entrepreneurs’ social networks allow them to obtain state-of-the-art knowledge and diverse market information, which are necessary for generating creative ideas (Guo and Miller 2010; Perry-Smith 2006; Wu and Leung 2005). When exploring the process of new venture creation in Chinese context, guanxi network has long been used as the most effective approach to understanding the indigenous social phenomenon among Chinese entrepreneurs (Peng et al. 2016). Integrating social exchange theory and the Confucianism, guanxi is perceived by organizational researchers as a source of social capital and an informal governance mechanism in Chinese business contexts (e.g. Chen et al. 2015b; Peng and Luo 2000; Xin and Pearce 1996). Guanxi networks profoundly affect entrepreneurial process by facilitating reciprocity and reducing the need for formal controls (Burt 1992). The evolution of entrepreneurs’ guanxi networks has been found to play a crucial role in the development and expansion of a start-up company due to a variety of social resources which can be accessed through social ties (Peng et al. 2016). Therefore, to better reflect Chinese entrepreneurs’ networking behavior, we incorporate the concept of guanxi, which includes four types of social ties, namely family ties, business ties, community ties, and governance ties.

Happiness perceived by start-up founders embodies their satisfaction with the life quality after new venture creation, which may be the momentum of moving the business forward. Surprisingly, little work has been done to explore what determines entrepreneurs’ happiness. Drawing upon the theories of entrepreneurial cognition and social networks, the paper contributes to the existing literature by addressing a critical research question: how do creative entrepreneurs’ cognitive style and guanxi networks jointly affect entrepreneurial happiness through increasing entrepreneurs’ individual creativity and their firm creativity. Figure 1 shows the conceptual framework of this study.

Fig. 1
figure 1

Conceptual framework

Full size image

Theoretical background and hypotheses

Entrepreneurial happiness

Two theoretical perspectives in defining happiness are dominant in the literature, namely hedonic view and eudaimonic view (Ryan and Deci 2000; Ryff and Singer 2008). The hedonic view suggests that happiness involves pleasant feelings and judgments of life satisfaction such as relationships, health, work, and leisure, and affects balance (Diener et al. 1999). On the contrary, the eudaimonic view indicates that happiness involves doing what is right and virtuous, growing, pursing important or self-concordant goals, and using and developing one’s skills and talents, regardless of how one may actually feel at any point in time (Seligman 2002; Fisher 2010).

Entrepreneurial happiness is indicative of an entrepreneur’s psychological well-being, which has been found to be an essential mental condition required for effective overall human functioning (Andersson 2008; Ryan and Deci 2000). Prior literature has suggested that the coexistence of job satisfaction, career accomplishment, and happiness constitutes an inseparable body of entrepreneurial success (Ezzedeen and Zikic 2015; Parasuraman and Simmers 2001; Wach et al. 2016). It implies that a start-up may not gain momentum of moving forward if the entrepreneur chronically feels unsatisfied, frustrated, and dejected (Uy et al. 2017). Indeed, the existing research has observed that entrepreneurial happiness underpins entrepreneurs’ persistence and endurance in running the new venture (Carree and Verheul 2012) and entrepreneurs who have less happiness are more likely to close their businesses even when those are profitable (Gorgievski et al. 2011).

One distinguishing trait of creative entrepreneurs is their bohemian lifestyle towards new venture creation, which is characterized by a devotion to art for art’s sake (Eikhof and Haunschild 2006). Artists and creative workers decide to launch their own business because entrepreneurship offers a pleasure to work with their interests, skills, and talents (Paige and Littrell 2002). Moreover, work-family conflict is often the source of entrepreneurs’ work-related stress (Parasuraman and Simmers 2001). Prior research has shown that some individuals devote themselves into entrepreneurial career because being a business owner allows them more time with their family (Renko et al. 2012). Entrepreneurial happiness, therefore, may have many implications not only for explaining entrepreneurs’ inclination towards self-employment but also for the perseverance in the face of adversity. Considering the motivation for creative individuals to embark upon entrepreneurial career (Chaston and Sadler-Smith 2012; Ellmeier 2003), entrepreneurial happiness appears to be a more salient career goal for creative entrepreneurs.

Based on theories of happiness at work, we define entrepreneurial happiness as the aggregation of pleasure and positive mood perceived by entrepreneurs over the new venture activities. Therefore, entrepreneurial happiness may stem from the positive life experience (e.g. work-family balance, flexible working hours), desirable new venture outcomes (e.g. revenue growth), and entrepreneurs’ self-realization (e.g. career goal achievement). Although entrepreneurial happiness may broadly include a variety of components that embody entrepreneurs’ well-being, it directly reflects the general life satisfaction that entrepreneurs perceive after founding the new ventures and may help predict their positive attitude towards the entrepreneurial journey (Binder and Coad 2013).

Cognitive style and creativity

In the creative industries, the start-up founders play a pivotal role in coordinating daily operation and facilitating intra-firm creative ideation for product/service development. The theory of entrepreneurial cognition points out that entrepreneurs seek to identify and seize market opportunity for new venture creation and growth by using their knowledge structure to make assessments, judgments, and decisions (Mitchell et al. 2002). Entrepreneurial cognition is the simplifying mental models that help business founders to identify and invent creative products or services, and to assemble the necessary resources to establish businesses (Mitchell et al. 2007). With regard to the viewpoint of entrepreneurial cognition, cognitive styles stipulate a creative entrepreneur’s mental attributes which may either facilitate or hinder creative process engagement (Armstrong et al. 2012; Chaston and Sadler-Smith 2012). For example, cognitive styles may determine an entrepreneur’s ability to recognize complex constellations of cues that comprise potential business ideas and venturing opportunities which others overlook (Baron and Henry 2010).

Cognitive styles refer to consistent individual differences in how individuals perceive, think, learn, take decisions, solve problems and relate to others (Witkin et al. 1977). Researchers have found that individual cognitive styles profoundly affect creativity through exerting influences on intellectual process, such as problem identification, information seeking and interpretation, and idea generation. (Buttner and Gryskiewicz 1993; Hayes and Allinson 1994; Reiter-Palmon and Illies 2004). Ideal cognitive style can stimulate creativity through focusing individuals’ attention on all relevant facts and activating their imagination to produce creative ideas (Armstrong et al. 2012). More importantly, cognitive style determines whether an individual can develop some cognitive-perceptual skills which are conducive to creativity, including divergent thinking, use of effective heuristics, and the ability and inclination to engage in deep concentration for long periods of time (Shalley and Gilson 2004).

Cools and Van den Broeck (2007) identify three-dimensional indicators of individual cognitive styles, which reflect three crucial modes of intellectual functioning at work, including knowing style, creating style, and planning style. Specifically, individuals with a knowing style look for facts and data. They want to know exactly the way things are and tend to retain many facts and details; they enjoy complex problems and the process of finding a clear and rational solution. In contrast, individuals with a creating style see problems as opportunities and they like uncertainty and freedom. Creating style represents a tendency to enjoy using imagination and unique perspective to generate many new ideas. Furthermore, individuals with a planning style are characterized by a need for structure. Planners like to organize, control and prefer a well-structured work environment; they attach importance to preparation and planning to reach their objectives.

The existing literature posits strong theoretical support to the impacts of entrepreneurs’ cognitive style on their individual creativity and firm creativity (Amabile et al. 1996; Houtz et al. 2003). For example, one prerequisite for creativity is to have domain-relevant knowledge and necessary information (Amabile 1996). Entrepreneurs with knowing style strive to access information and market intelligence as much as possible, which benefits their creative idea generation and organizational innovativeness. Creating style is indicative of an individual’s idiosyncrasy of using imaginative thinking and unconventional way to generate original and unique ideas (Cools et al. 2009). Entrepreneurs with a high level of creating style embrace divergent thinking, which is the core cognitive skill for producing a variety of alternatives, solutions, or potentially related ideas (Amabile et al. 1996; Armstrong et al. 2012; Kirton 2003). Planning style demonstrates a preference for structure and order, which are a pragmatic and efficient approach to problem-solving (Cools et al. 2009). Entrepreneurs with a high level of planning style can be convergent thinkers, who are good at spotting useful and creative solutions by narrowing down raw ideas and screening out infeasible plans (Vincent et al. 2002).

Based on the rationale proposed above, three types of cognitive styles exhibit distinct intellectual mechanisms which are conducive to creative ideation. Therefore, we propose:

  • Hypothesis 1a: Creative entrepreneurs’ cognitive styles (knowing style, creating style, and planning style) are positively related to individual creativity.

  • Hypothesis 1b: Creative entrepreneurs’ cognitive styles (knowing style, creating style, and planning style) are positively related to firm creativity.

Guanxi network ties and creativity

As a unique form of dyadic social behavior in Chinese culture, guanxi has been advocated as a pervasive relationship lubricant that most entrepreneurs use to increase the efficiency and effectiveness of business operations (Luo et al. 2012; Tsui and Farh 1997). Entrepreneurs’ guanxi practice refers to the concept of drawing on a web of connections to secure strategic advantages for desirable new venture outcomes (Park and Luo 2001). The greater the environmental uncertainty, the heavier entrepreneurs’ reliance on social ties for acquiring advantages (Peng and Luo 2000). Prior research has provided evidence that entrepreneurs’ guanxi networks benefit start-up growth in Chinese culture through providing institutional advantages and necessary resources (Luo et al. 2012; Wu and Leung 2005).

Four types of guanxi networks for entrepreneurs have been widely observed, namely family tie, business tie, community tie, and governance tie (Guo and Miller 2010; Park and Luo 2001). An entrepreneurial guanxi network starts with a small core circle of affection-based guanxi ties with family members and close friends. Family ties are characterized by unconditional loyalty and involve social obligations that are not based on reciprocity (Tsui and Farh 1997). As the new venture continues to grow, entrepreneurs’ guanxi network enlarges to include an intermediary and a periphery circle composed of reciprocity-based and acquaintance-based guanxi ties in order to support the expanding needs (Guo and Miller 2010). Business ties are built on trust and cooperation with suppliers, customers, and competitors, and maintained by implicit rules of reciprocity and social obligations (Park and Luo 2001). Similarly, community ties represent a variation of business ties resulting from entrepreneurs’ social interaction with members in any form of business community, such as industrial association, trade union etc. (Rao et al. 2008). Most entrepreneurs seek to obtain institutional support by participating in business community due to a new venture’s desperate need for legitimacy, market intelligence and bargaining position. Moreover, entrepreneurs’ government ties, which involve relationship with government officials at various levels of administration and regulation agencies, offer timely access to accurate information, funding, or resources for new venture growth (Peng and Luo 2000).

Two seminal lines of research on creativity have consistently suggested that acquiring information and knowledge in the relevant domain is a prerequisite for individual and organizational creativity (i.e. Amabile 1996; Woodman et al. 1993). Creativity in an entrepreneurial firm needs to be underpinned by the sufficient spectrum of information flow for the practical and novel ideas to emerge. The dyadic obligation and reciprocity involved in guanxi networks trigger the exchange of pivotal information. Therefore, entrepreneurs’ guanxi practice may play a stimulating role in a new venture’s information advantage and strategic flexibility for conducting creative initiatives. Accordingly, we propose:

  • Hypothesis 2a: Creative entrepreneurs’ guanxi networks (family tie, business tie, community tie, and government tie) are positively related to individual creativity.

  • Hypothesis 2b: Creative entrepreneurs’ guanxi networks (family tie, business tie, community tie, and government tie) are positively related to firm creativity.

Creativity and entrepreneurial happiness

Research has acknowledged the importance of creativity for the initiation and survival of firms in complex and competitive environments (Oldham and Cummings 1996). Particularly in creative industries where value creation is based on novelty, uniqueness, and originality (Henry and De Bruin 2011; Throsby 2008), the growth of a creative start-up is predominantly influenced by entrepreneur’s individual creativity and firm creativity. Individual creativity of entrepreneurs manifests the implementation of novel, useful ideas to establish a new venture for exploiting market opportunities through delivering innovative products or services with new business models (Amabile 1996; Henry and De Bruin 2011). Specifically, entrepreneurial creativity indicates business founders’ personal ingenuity and fluency in generating creative ideas for solving managerial problems as well as acquiring competitive advantages. In comparison, firm creativity refers to novelty, originality, and usefulness of a new creative ventures’ business outputs, including products, services, processes, and procedures (Amabile 1996; Oldham and Cummings 1996). Start-up companies in creative industries heavily rely on the artistry, uniqueness, and originality of their products or services to attract potential audience’s attention and achieve initial market success (Ellmeier 2003; Henry and De Bruin 2011).

In creative industries, new venture creation embodies entrepreneurs’ discretion to fulfill their career aspiration as a creative practitioner (Ellmeier 2003). Many creative entrepreneurs decide to run a new venture because they seek to combine their work, interest and talent (Chaston and Sadler-Smith 2012; Ellmeier 2003). Research observes that creative practitioners are drawn to self-employment because it implies opportunities to build businesses of their own as well as an outlet for their creative talents (Feldman and Bolino 2000). Founding a new venture, thereby, provides creative entrepreneurs more autonomy to draw inspiration and unleash imagination for what they want to achieve in the creative profession. Indeed, as suggested by prior research, self-employed individuals obtain satisfaction from leading an independent lifestyle and “being the one in charge” (Binder and Coad 2013). Entrepreneurs feel satisfied and happy with their jobs because of greater autonomy, more flexibility, and skill utilization (Hundley 2001).

Because of creative entrepreneurs’ idiosyncratic motivation behind founding a new venture, creativity may serve as an important cognitive mechanism which converts the business founders’ enterprising spirit into the perception of happiness. Although it has not been directly tested, the existing literature implies that creativity is the predictor of creative entrepreneurs’ happiness. For instance, Hennessey (1999) suggests that creative individuals are happier when they construe their work as a positive challenge and have a chance to find a creative solution for a problem. Entrepreneurs who have a strong desire for creativity have higher levels of psychological well-being and overall life satisfaction when they perceive that their individual creativity can exert positive influence on new venture process (Feldman and Bolino 2000). In contrast, firm creativity is the embodiment of creative entrepreneurs’ career achievement, which facilitates their psychological fulfillment and well-being. These findings point to the positive effect of individual creativity and firm creativity on creative entrepreneurs’ happiness. Accordingly, we propose:

  • Hypothesis 3a: Creative entrepreneurs’ individual creativity is positively related to their happiness.

  • Hypothesis 3b: Firm creativity is positively related to creative entrepreneurs’ happiness.

Methodology

Research design and data collection

The representative sample in this study is entrepreneurs in the creative industries of Taiwan. Creative industries are one of the fast-growing economic sectors in Taiwan and have been playing an important role in the government’s policy on economic reform (Hui 2007). Creative industries in Taiwan are blooming and attract many entrepreneurs to initiate their creative businesses, making Taiwan a suitable context for studying creative entrepreneurship.

United Nations Educational, Scientific and Cultural Organization (UNESCO 2013) defined creative industries as sectors of organized activity which uses creativity, cultural knowledge, and intellectual property for production or reproduction, promotion, distribution and/or commercialization of goods, services and activities with a cultural, artistic, social or heritage-related nature. Moreover, Throsby (2008) suggests that cultural and creative works rely heavily on human creativity and intellectual property that are attributable to the individual or group producing the goods or services. Drawing upon a market-based aspect of creative industries, Potts et al. (2008) suggests that creative business creates value through providing new choices over products, services or performances not previously imagined from the representation, combination and coordination of cultural and creative elements.

We adopt the definition of creative industries made by the United Kingdom’s Department of Culture, Media and Sport (DCMS 2001), which stipulates creative businesses as the following business sectors: (1) Cultural and creative goods production (e.g. publishing, paintings, gadgets, crafts); (2) Cultural and creative goods retailing (e.g. books, antiques); (3) Cultural and creative digital goods production (e.g. computer software, film, music, etc.); (4) Cultural and creative value-adding services (e.g. design, architecture, advertising, consulting, etc.); (5) Cultural and creative experiencing services (e.g. museum, theme park, etc.); (6) Cultural and creative performing arts (opera, circus, orchestra, etc.). Creative entrepreneurs whose firm engages in the following creative businesses were chosen as the targeted respondent: visual arts, performing arts, cultural heritage, craft, film, media, publishing, advertising, product design, visual communication, fashion and branding, architecture, digital content, cultural experiencing, and pop music (DCMS 2001).

Our targeted sample included a total of 954 creative entrepreneurs. Through questionnaire survey, 270 valid responses were collected, resulting in a 28% of response rate. One hundred and ninety-eight (73.3%) respondents were male, and 72 (26.7%) were female. One hundred and twenty-six (46.6%) respondents were over 46 years old, 69 (25.6%) were 41–45 years old, 38 (14.1%) were 36–40 years old, 30 (11.1%) were 31–35 years old, and only 7 (2.6%) were under 30 years old. Thirty-eight (14.1%) respondents held a senior high school degree or below, 48 (17.8%) held a college degree, 75 (27.8%) held a bachelor’s degree, 99 (36.6%) held a master’s degree, and 10 (3.7%) held a doctorate. One hundred and forty-three (52.9%) respondents just started their first new venture, 72 (26.8%) had started one new venture before, and 55 (20.3%) had founded more than two new ventures.

Regarding the core business of the surveyed creative entrepreneurs’ new ventures, 60 (22.2%) of the new ventures engaged in creative goods production, 13 (4.8%) in creative goods retailing, 19 (7%) in creative digital goods and production, 159 (58.9%) in creative value-adding services, 13 (4.8%) in creative experiencing services, 6 (2.2%) in creative performing arts. In terms of the financial capital, 82 (30.4%) creative firms had capital of less than 500,000 NTD, 54 (20%) had capital of 500,001 NTD to 1,000,000 NTD, 20 (7.4%) had capital of 1,000,001 NTD to 1,500,000 NTD, and 19 (7.1%) had capital of 1,500,001 NTD to 2,000,000 NTD, and 95 (35.1%) had capital more than 2,000,000 NTD. Moreover, 140 creative firms (51.9%) had less than 5 employees, 112 (41.5%) had 6 to 30 employees, 12 (4.4%) had 31 to 100 employees, 4 (1.5%) had 101 to 250 employees, and 2 (0.7%) had more than 250 employees. In addition, 34 (12.6%) creative start-ups were at the stage of firm creation, 118 (43.7%) were at the stage of early firm growth, and 118 (43.7%) were at the stage of later firm growth.

Variable measures

Creative cognitive style

For creative cognitive style, we used the scale developed by Cools and Van den Broeck (2007), which ranges from 1, “strongly disagree,” to 5, “strongly agree”. This measure has multi-item subscales corresponding to three dimensions: (1) knowing, (2) planning, and (3) creating (α = .82, .81, and .70, respectively). Examples of items include “I like to take time to clarify the nature of the problem” (knowing), “I easily come out with creative ideas” (creating), and “I like to generate criteria that can be used to identify the best options” (planning).

Guanxi networks

According to the existing literature, guanxi networks consist of four types of social ties, including family-tie, business-tie, community-tie, and government-tie (Park and Luo 2001; Peng and Luo 2000). We measured creative entrepreneurs’ guanxi networks by using the scale developed in the prior research, which includes four dimensions for each social ties (Peng and Luo 2000). The scale ranges from 1, “strongly disagree,” to 5, “strongly agree”. The Cronbach’s alpha coefficients of the four dimensions are .78, .80, .92, and .87, respectively.

Sample items for guanxi networks include “when initiating my business, I received strong emotional support from my family members and relatives” (family-tie); “I maintain a good relationship with customers” (business-tie), “Participating in business communities or associations provides me with a source of intelligence, expertise, useful information and new knowledge for running my business” (community-tie); and “My guanxi networks with government and regulatory officials enable me to run my business smoothly” (government-tie).

Individual creativity

Entrepreneurs’ individual creativity is measured as a set of personality traits including broad interests, independence of judgment, autonomy, and a set of preference for idea generation and divergent thinking (Amabile et al. 1996). To measure individual creativity of entrepreneurs, respondents reported on a five-item scale (α = 0.8), ranging from 1, “strongly disagree,” to 5, “strongly agree” (Amabile 1996; Oldham and Cummings 1996; Zhou & George 2001). An example item is “I usually search out new creative elements and inspiration, and then utilize these ideas in my business”. Although self-reported measures are exposed to the potential threat of common method bias, prior research has found that self-reported creativity is highly correlated with third-party ratings of creativity (Axtell et al. 2000). In addition, it has also been suggested that self-report creativity is best suited in a complicate work context because the respondents are the ones who are aware of the subtle things they do in their jobs that make them creative (Shalley et al. 2009).

Firm creativity

Firm creativity is defined as products, ideas, or procedures that are novel, original and useful to an organization (Oldham and Cummings 1996). Top management of a creative start-up not only supervise the process of idea generation for their employees but also has to monitor the market trends outside the company. The unique position of creative entrepreneurs in the company makes them the appropriate candidate to evaluate creative accomplishment of the firm as the whole. To measure firm creativity, entrepreneurs were asked to report on a four item scale (α = .88), ranging from 1, “strongly disagree,” to 5, “strongly agree”. An example item is “Compared to my competitors in the creative industries, the work (including business ideas, products, services) my firm produces is novel and original”.

Entrepreneurial happiness

Following the conceptualization of entrepreneurial happiness proposed by Carree and Verheul (2012), we define entrepreneurs’ happiness as the general satisfaction with their life after founding the new venture. Through integrating the existing literature on entrepreneurial happiness (Carree and Verheul 2012; Parasuraman and Simmers 2001; Uy et al. 2017), we adopted a three-item scale to measure entrepreneurial happiness, which is embodied in entrepreneurs’ psychological well-being, leisure time satisfaction, and perceived work-life equilibrium. The scale (α = .81) ranges from 1, “completely dissatisfied,” to 5, “fully satisfied”.

Control variables

To ensure the accuracy of our model estimation, we controlled for the variables that may have influence on entrepreneurs’ happiness, including firm-level variables (i.e. year of establishment, venturing stage) and individual-level variables (i.e. age, gender).

Data analysis

We adopted a comprehensive, two-step modeling approach proposed by Anderson and Gerbing (1988) to test the hypothesized model. Following this approach, we first conducted confirmatory factor analysis (CFA) to assess the structure of the observed measures for the 10 latent variables with all covariances between latent variables unconstrained. Structural equation modeling was then performed based on the measurement model to estimate the fit of the hypothesized model to the observed data as well as testing the hypotheses. Structural equation modelling (SEM) offers a simultaneous test of an entire system of variables in a hypothesized model, enabling assessment of the extent to which the model is consistent with the observed data (Kline 2011).

To measure the model fit, we tested chi-square values (χ2), which assesses the extent to which the covariance estimated in the hypothesized model matches the covariance in the observed model (Kline 2011). In addition, this study also reports the comparative fix index (CFI; Bentler 1990), Jöreskog and Sörbom goodness-of-fit index (GFI), the standardized root mean square residual (SRMR), and the root mean square error of approximation (RMSEA; Steiger 1990) to measure model fit. These indexes indicate the extent to which a research model provides an improved overall fit relative to a null model in which the correlations among observed variables are assumed to be zero.

As shown in Table 1, we furthermore tested the convergent validity and discriminant validity of our measures based on the results of CFA. Results suggested that all factor loadings are greater than 0.5, most average variance extracted values are either greater than or close to the threshold 0.5, and all of construct reliability (CR) values are greater than 0.7, indicating the convergent validity of the constructs is adequate (Fornell and Larcker 1981; Hair et al. 2010). Moreover, according to the idea widely adopted by prior research to examine discriminant validity (Fornell and Larcker 1981), a latent construct should explain more of the variance in its item measures than it shares with another construct. Therefore, the value of the average variance extracted (AVE) should be greater than the squared correlation coefficient for adequate discriminant validity. According to the results, all AVE values of the constructs are above the corresponding squared correlation coefficients, indicating the criterion is met.

Table 1 Validity and reliability of construct measures
Full size table

In addition, to mitigate and assess the magnitude of common method bias, we adopted both the procedural remedies and statistical methods suggested by Podsakoff et al. (2003). Specifically, respondents were assured of anonymity and confidentiality to reduce evaluation apprehension during the survey. Moreover, Harman’s one-factor test was used, extracting 10 distinct factors that accounted for 73% of the total variance, with the first factor explaining 23%. Our results showed that no single factor emerged, nor did one factor account for most of the variance.

Results

Correlations

Table 2 shows the descriptive statistics and correlations for the variables in the study.

Table 2 Descriptive statistics and correlationsa
Full size table

Measurement model

The model fit indexes of measurement model are shown in Table 2, which indicates a good fit to the data (χ2 [450] = 773.295, p < .001; CFI = .932, GFI = .858, SRMR = .059, RMSEA = .052). The results provided evidence that further examination of the structural model was justified. Although the chi-square test was statistically significant, literature has suggested that this statistic is well known to be sensitive to sample size and may be significant even when the differences between observed and model-implied covariances are relatively small (Kline 2011). Thus, we report multiple indexes in assessing model fit, as generally suggested by SEM scholars (e.g., Bollen 1989).

Structural model

Structural modeling results suggested that the hypothesized model fit the data well (χ2 [558] = 902.665, p < .001; CFI = .933, GFI = .853, SRMR = .0594, RMSEA = .048). Table 3 summarizes all the model fit indexes. Figure 2 presents the overall structural model with path coefficients.

Table 3 Summary of model fit indexes
Full size table
Fig. 2
figure 2

Structural equation model

Full size image

Hypothesis 1a, which states that creative entrepreneurs’ cognitive styles (knowing, planning, and creating) are positively related to their individual creativity, was partially supported. Specifically, creating style has a positive effect on entrepreneurs’ creativity (β = .98, p <. 001), but planning style has a negative effect (β = −.37, p <. 05). Hypothesis 1b, which states that creative entrepreneurs’ cognitive style (knowing, planning, and creating) are positively related to their firm creativity, were partially supported as well. Creating style has a positive effect on firm creativity (β = .59, p <. 001), but planning style has a negative effect (β = −.28, p <. 05).

Hypothesis 2a, which postulates the positive effects of creative entrepreneurs’ guanxi networks (family tie, business tie, community tie, and government tie) on individual creativity, was partially supported. Specifically, entrepreneurs’ family tie is positively related to individual creativity (β = .16, p <. 05), business tie has a positive effect (β = .18, p <. 05), and government tie has a positive effect (β = .21, p <. 01). Hypothesis 2b, which states that creative entrepreneurs’ guanxi networks (family tie, business tie, community tie, and government tie) are positively related to their firm creativity, was partially supported. Specifically, entrepreneurs’ family tie has a positive effect on firm creativity (β = .17, p <. 05). Entrepreneurs’ business tie also has a positive effect on firm creativity (β = .16, p <. 05).

Hypothesis 3a, which states that creative entrepreneurs’ creativity is positively related to their entrepreneurial happiness, was supported (β = .20, p <. 01). Hypothesis 3b, which states that firm creativity is positively related to creative entrepreneurs’ happiness, was also supported (β = .19, p <. 01).

Discussions

In this study, we examine the relationship between entrepreneurs’ cognition style, guanxi networks and creativity for better understanding entrepreneurial happiness in creative industries. Our findings indicate that entrepreneurs with creating style have high level of individual creativity and firm creativity. The findings are consistent with the work of Cools and Van den Broeck (2007), which suggests that individuals with a creating style prefer experimentation and they see problem and uncertainty as opportunities. Creating style is similar to the innovative cognitive style of Kirton (2003), which indicates the individual disposition to think tangentially and generate ideas from a paradigm-breaking and unconventional approach. On the contrary, the results suggest that entrepreneurs with high planning style are prone to have lower level of individual creativity and firm creativity. As suggested by Cools and Van den Broeck (2007), entrepreneurs with a planning style are characterized by a need for structure and objectives; they like to design and follow a well-structured work procedure. Even though the results do not support our prediction, the findings echo Gorgievski et al. (2011) and reveal that entrepreneurs who follow the existing rules, pursue standardization and seek structural solutions may show less creativity in new venture activities.

Previous literature has suggested that entrepreneurs in Chinese context rely heavily on guanxi practice in order to obtain resources necessary for new venture operation, including financial support, critical information, and institutional advantage (Delmar and Shane 2004; Luo et al. 2012). Drawing on the social interaction perspective of creativity (Perry-Smith 2006), our findings indicate that creative entrepreneurs’ guanxi networks (i.e. family tie, business tie, community tie, and government tie) are conducive to their individual creativity and firm creativity. Specifically, family tie, which is characterized by unconditional loyalty and non-reciprocal social obligation, allows creative entrepreneurs to receive financial and emotional support (Tsui and Farh 1997). Consistent with prior research (Amabile et al. 2005; Guo and Miller 2010), our findings suggest that family tie indeed benefits entrepreneurs’ individual creativity and firm creativity through offering more financial flexibility and positive affect.

In contrast, entrepreneurs who have strong business ties with customers, suppliers, and competitors may have better chance to co-create value for their new ventures and the creative industries (Park and Luo 2001). Cultivating business tie enables entrepreneurs to have an immediate source of market intelligence and useful information, which are vital for idea generation (Stam et al. 2014). As a matter of fact, our findings provide evidence that creative entrepreneurs’ business tie enhances both individual creativity and firm creativity. Nevertheless, as a comparable variation of business tie, creative entrepreneurs’ community tie shows no direct effect on their individual creativity and firm creativity. It has been observed that creative entrepreneurs participate in business community for drawing inspiration, exchanging design ideas and seeking opportunity for collaboration (Taylor 2011), while the tacit knowledge of creative industries is difficult to flow across organizational boundary.

Furthermore, research has shown that entrepreneurs are often unsuccessful in launching creative projects because of a lack of strategic resources and institutional support (Stam et al. 2014). According to Podolny and Page (1998), entrepreneurs who establish ties with government officials are in an attempt to access scarce resources, to obtain information about policies, and to reduce uncertainty. As found in this study, the strategic advantages that entrepreneurs receive through government tie may play an important role in their individual creativity.

More importantly, this study confirms the positive effects of individual creativity and firm creativity on creative entrepreneurs’ perceived happiness. One distinguishing characteristic of creative entrepreneurs is their lifestyle-driven tendency towards new venture creation (Eikhof and Haunschild 2006). Previous literature has implied that creative entrepreneurs are happier and more satisfied with their entrepreneurial career when they experience themselves being creative at work (Hennessey 1999). The results of this paper clearly show that being creative is pivotal to creative entrepreneurs’ happiness.

Conclusions

Creative industries are of the increasing importance to innovation, cultural development and global economy, bringing about huge financial benefit and job opportunities around the world (Hartley 2005; Venturelli 2005). Since creative industries are mainly comprised by small and start-up companies, the initiation and survival of creative businesses has become a matter of theoretical concern for business venturing and entrepreneurship researchers (Chaston and Sadler-Smith 2012; Hartley 2005). The well-being experience that entrepreneurs derive from their start-up venture is an important determinant of venture survival (Binder and Coad 2013; Carree and Verheul 2012). On the basis of entrepreneurial cognition theory (Cools and Van den Broeck 2007; Mitchell et al. 2007) and social theory of creativity (Perry-Smith 2006), this paper investigates how cognitive style and guanxi networks jointly affect creative entrepreneurs’ happiness through making them more creative in both individual level and firm level.

This paper makes several contributions to the literature. Firstly, entrepreneurs in creative industries are notable for a distinctive management style (Chaston and Sadler-Smith 2012). The current study enriches the literature by empirically investigating entrepreneurial behaviors in creative industries. Secondly, entrepreneurial happiness has long been regarded as an integral part of entrepreneurial success (Carree and Verheul 2012; Gorgievski et al. 2011). Despite the scholars’ growing attention on entrepreneurial happiness (Andersson 2008), little work has been done to explore what makes entrepreneurs feel happy and well-being in their career. The current study is among the first to provide insights into the determinants of entrepreneurial happiness. Thirdly, this study sheds lights on entrepreneurial creativity, which is at the heart of new venture activities in creative industries (Throsby 2008). Our work reveals that cognitive style and guanxi networks are likely to determine entrepreneurial happiness through affecting entrepreneurs’ individual creativity and firm creativity.

Limitations and future research

This paper is subjective to some limitations, which indicate the directions for future research. Firstly, the cross-sectional survey design of our paper prevents a demonstration of causality and also limits our ability to explore dynamic phenomenon such as the changes of guanxi ties and creativity over time. Given the volatile nature of these variables, longitudinal studies are thus needed. More importantly, the extent of perceived happiness can also be observed on the longitudinal basis since a time-lagged design may effectively clarify the dynamic process through which the instant work experience and specific events of entrepreneurial activities jointly exert impact on entrepreneurs’ positive feeling. Notably, a recent study adopts a daily events scale to explore employees’ psychological well-being (Junça-Silva et al. 2017). This approach is also suitable for research on entrepreneurial happiness as it may shed light on how the various events occurred in new venture activities are linked to entrepreneurs’ psychological well-being. Secondly, this study was conducted in the creative industries of Taiwan, so that our findings’ generalizability to other contexts needs to be further verified. Future research is encouraged to replicate the findings with a cross-cultural approach. Thirdly, the current study is the first to examine creativity as the antecedent of creative entrepreneurs’ happiness. Literature has suggested that psychological traits, social interaction, economic satisfaction, and emotional state are also intertwined with each other to impact happiness perceived by self-employed (Binder and Coad 2013; Hundley 2001). Theoretically, it is fruitful to comprehensively explore other important determinants of entrepreneurial happiness.