3.2.2. Solvency

of profitability.

We have compared two groups according to their solvency: low level, up to the first quartile, versus high level.

Figure 5 shows how the median age of cultural enterprises with high solvency is over 20 years, while in the case of firms with low solvency, the median age is around 15 years. This indicates that the firms with greater solvency tend to be older.

**Figure 5.** Box plot for solvency ratio.

Figure 6 represents the survival curve for the cultural firms according to the solvency levels mentioned above. Cultural enterprises with low solvency ratios have lower survival rates; this difference increases with age. Therefore, there is a greater risk of disappearance in those cultural enterprises with low solvency ratios than in those cultural enterprises with high solvency ratios.

**Figure 6.** Survival curve for the cultural firms by solvency.

Table 7 shows the results of the Harrington–Fleming test. The obtained *p*-value (*p* = 0.000114) indicates that the difference between both groups of solvency levels is significant.

We checked to see if the low solvency level is an influential factor in the survival of cultural enterprises by applying the Cox regression model. The results of this model are shown in Table 8. It shows that the obtained *p*-value for the test (*p* = 0.000301) is clearly lower than the usual level of significance. This indicates that the solvency factor is statistically significant. This confirms that solvency is an important factor in the survival of cultural enterprises. As the value of the HR collected in the table (19.58647) shows, the risk of disappearance in cultural enterprises with a low solvency ratio is multiplied by almost twenty.



### 3.2.3. Indebtedness

Two groups of indebtedness are considered: low and high. There is a high level of indebtedness when its ratio exceeds the mean value; otherwise, we considered it low. Table 9 shows the results of the statistics that describe this ratio for the cultural firms analysed. From these data, we determined that cultural enterprises exceeding the value of 4.362 have a high debt ratio.



Then we compared cultural enterprises according to their indebtedness levels. Figure 7 shows the box plot of high and low groups. These show how cultural enterprises with low debt ratios have a higher median age, around 25 years, compared with those whose debt ratios are high, for which the median age is just over 20 years. This seems to indicate that cultural enterprises with low debt ratios tend to be older.

**Figure 7.** Box plot for debt ratio.

The survival curve for the cultural firms according to their level of indebtedness is represented in Figure 8. As can be seen, the survival curves for the cultural firms with high and low ratios of indebtedness are different. Cultural enterprises with higher debt ratios have survival rates lower than those whose ratio is low.

**Figure 8.** Survival curve for the cultural firms by indebtedness.

Table 10 presents the results of the Harrington–Fleming test. The *p*-value obtained (*p* = 0.0171) shows that this factor is significant because its significance level is lower than the level commonly used (0.05). This indicates that the effect of indebtedness on the survival of cultural enterprises is statistically significant.



We applied the Cox regression model to verify that this factor is influential in the survival of the firms analysed. Table 11 shows the results of this model and indicates that the regression coefficient is positive (coefficient = 1.1729), which shows that the risk of disappearance of cultural enterprises with high debt ratios is greater compared to those with low debt rates, which is the reference level. The *p*-value (0.0308) indicates that its effect is statistically significant. In particular, as indicated by the HR, the more indebted firms have a risk of disappearance 3.2314 times greater than the less indebted ones.


### *3.3. Analysis of Accounting Factors that Influence the Survival of Non-Cultural Enterprises*

In order to evaluate similarities and differences in accounting parameters between cultural and non-cultural firms, profitability, solvency and indebtedness have been obtained for the 3791 non-cultural firms. Applying the Cox regression model, we studied the relationship between these parameters and the firms' risk of disappearance.

The results from the model for profitability are shown in Table 12. It shows that the regression coefficient is positive (coefficient = 1.2224), indicating that the risk of disappearance increases in non-cultural firms whose profitability is negative compared to those whose profitability is positive at the reference level. The *p*-value obtained (*p* = 0.000729) shows the effect is statistically significant. An HR greater than 1 indicates a greater risk of disappearance. In this case, HR has a value of 3.395, which indicates that the risk of disappearance of a non-cultural firm with negative profitability is 3.3952 times higher than that of a firm with positive profitability. The effect is not as significant as for cultural firms.


**Table 12.** Cox's model for non-cultural firms.

Applying the same Cox regression model, we checked to see if the low solvency level is an influential factor in the survival of non-cultural enterprises. The results of this model are shown in Table 12. The resulting *p*-value (*p* = 0.00722) reveals that this parameter is statistically significant. It is confirmed that solvency affects the survival of non-cultural enterprises. Considering the HR (2.6572), the risk of disappearance in non-cultural enterprises with a low solvency ratio is doubled in relation to highly solvent companies.

It might be highlighted that solvency is a risk factor for the survival of firms, but especially for cultural firms: HR = 19.586 against HR = 2.657 in non-cultural firms.

Finally, for the third factor under consideration, indebtedness, the same model applied to non-cultural firms in Spain shows there is no statistical significance (*p* = 0.382) in the analysed period.

## **4. Conclusions**

This article has examined the survival of cultural enterprises against non-cultural ones. In addition, the effect of different accounting factors on the survival of the firms has also been studied.

<sup>\*</sup> = significant at 5%.

The conducted study has shown, by using the survival curve of Kaplan and Meier, that the cultural orientation of the firms' business activity affects their survival. In effect, we have found that the fact of belonging to the group of cultural firms increases the risk of disappearance and that this risk is statistically significant.

We have also analysed the effect of different accounting variables on the survival of cultural enterprises. This study has shown that profitability, solvency and indebtedness are variables that have an influence.

The statistical significance of the above factors has been verified with the Harrington–Fleming test and the Cox regression model. The study shows statistically robust empirical evidence as regards the effect of the variables considered. Similarly, we have shown that profitability, solvency and indebtedness ratios have predictive capabilities to anticipate business failure. In particular, we have seen how the risk of disappearance of highly indebted cultural enterprises is three times that of those not indebted; that cultural enterprises with negative profitability have a risk of disappearance four times higher compared to those with positive profitability; and, finally, that firms with low solvency ratios have a risk of disappearance of almost twenty times higher than those whose solvency ratio is high.

Additionally, we have analyzed the behavior of these ratios in non-cultural firms to reveal differences in behaviour. The results show that the risk of disappearance of companies with low profitability is slightly higher in cultural firms than in non-cultural ones. The behaviour of cultural and non-cultural firms strongly differs in indebtedness: cultural firms with high and low indebtedness show a substantial difference in their risk of disappearance, while this parameter has no statistical significance in non-cultural companies. However, the behaviour of both types of companies especially differs in conditions of low solvency: the risk of disappearance in non-cultural companies with low solvency is 2.7 times higher than companies with high solvency. This index achieves 19.6 in cultural companies.

In view of the results, solvency is the ratio that reveals a risky situation for cultural enterprises with greater intensity, which seems to be consistent with the very nature of such enterprises and spreads the belief of their fragility. For this reason, the evaluation of the position and management of the solvency ratio in cultural enterprises is of utmost importance to the stakeholders in this sector.

This type of analysis is interesting from a triple perspective. First, these studies are relevant for cultural enterprises because they allow the design of business policies to minimise the weakness of cultural enterprises. Second, they are important for administrators because they allow a better understanding of the behaviour of cultural firms and the factors that influence their survival in order to develop effective policies to support a sustainable cultural and creative industry. Third, and finally, because the prosperity of these firms will result in the enhancement of cultural heritage. Due to the importance of this type of study, for future research, it would be interesting to undertake a longitudinal study to see these variables over a longer period.

**Author Contributions:** Conceptualization, M.d.P.M.D. and A.V.L.; formal analysis, M.d.P.M.D.; A.V.L. and M.d.R.C.; methodology, M.d.P.M.D.; A.V.L. and M.d.R.C.; project administration, M.d.P.M.D. and A.V.L. and M.d.R.C.; Writing—review & editing, M.d.P.M.D., A.V.L. and M.d.R.C. All authors have read and agreed to the published version of the manuscript.

**Funding:** This Research was funded by European Union though Atlantic CultureScape, grant number eapa\_744/2018. APC was funded by EU.

**Acknowledgments:** This research has been carried out in the framework of the Project AtlanticCultureScape eapa\_744/2018; Start Date: 2019-04-12; End date: 2022-03-31.

**Conflicts of Interest:** The authors declare no conflict of interest.

### **References**


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