Transformations  in
Business & Economics

UNPRODUCTIVE ENTREPRENEURSHIP IN POST-TRANSITION LITHUANIA: THE CASE OF "LAND USE CHANGE BUSINESS"
Zilvinas Zidonis

ABSTRACT.The article aims to fill research gap and to contribute to better understanding of how new institutional contexts in new EU member states influence entrepreneurial behaviour. Compare to Western Europe, entrepreneurial behavior in new EU states considerably differs in many ways. In spite of almost 20 years of political and economic transformation, there are big groups of entrepreneurs involved in rent seeking, semi-legal and shadow activities (Aidis, Van Praag, 2007), or as it is argued by Baumol (Baumol, 1990; Griffiths et al., 2012), they are unproductive entrepreneurs. The case study of Land Use Change Business reveals some unique aspects of unproductive entrepreneurial behavior in post-transition Lithuania. The findings suggest that turbulent transition period (1990-2004) created new path dependences and situations when new post-Soviet and "old" Soviet institutional settings were melted into a unique context. The paper analyses how in spite of formal institutions improvement and attempts to change entrepreneurial culture, new unproductive entrepreneurial opportunities persist to emerge. The findings prove that "land use change" entrepreneurs creatively adapt to the situation after Lithuania joined EU, and immediately identify the "gray" area where two different institutional settings join together to produce unique entrepreneurial opportunity .

KEYWORDS: unproductive entrepreneurship, path dependency, institutional theory, Central and Eastern European countries.

JEL classification: L26, P31, B52.