Entrepreneurial ecosystems in cities: The role of institutions

Abstract

Entrepreneurship activity varies significantly across cities. We use the novel data for 1,652 ecosystem actors across sixteen cities in nine developing and transition economies during 2018–2019 to examine the role that institutional context plays in facilitating the productive entrepreneurship and reducing the unproductive entrepreneurship. This study is the first to develop and test a model of multi-dimensional institutional arrangements in cities. It demonstrates that not just that institutions matter in shaping the entrepreneurship ecosystem in cities, but in particular those institutional arrangements enhancing the productive and reducing unproductive entrepreneurship. Our findings suggest that differences between normative, cognitive, and regulatory pillars are associated with variance in both types of entrepreneurship in cities. For the formation of productive and high-growth entrepreneurs, all three pillars of institutional arrangement matter. For unproductive entrepreneurship normative pillar of institutions and the role of civil society matter most. This study has theoretical and practical implications for entrepreneurship ecosystem policy in cities.

Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses

“…Further insights are needed to understand economic and psychological drivers of innovation during crises. While previous research demonstrates that context matters (Audretsch et al, 2021a ; Welter, 2011 ; Welter et al, 2019 ), the context of a crisis is a compelling, yet understudied, one. Welter et al ( 2019 ) outlines three recent and overlapping waves of contextualization in the entrepreneurship field and shows that the discussion has moved from challenging the Silicon Valley model by considering the why, what, and how of entrepreneurship (first wave) to considering more subjective elements in enactment of contexts (second wave), through broadening the domain of entrepreneurship research (third wave).…”

Necessity or opportunity? Government size, tax policy, corruption, and implications for entrepreneurship

“…Taxpayers in corrupt countries are likely to have lower trust that revenues will be used to provide quality public services. Trust in government can bolster tax morale and deter tax evasion (see Hammar et al, 2009;Torgler, 2003), encouraging compliance with tax requirements (see Scholz & Lubell, 1998), while mistrust reshapes incentives forentrepreneurship (Audretsch et al, 2021) and higher corruption redistributes government expenditure for corrupt needs and rentseeking. When faced with high corruption and a low level of government trust, both potential necessity and opportunity entrepreneurs may be wary of exposure to rent-seeking.…”

Exploring the Strategic Intent and Practices of University Accelerators: A Case of Australia

“…Entrepreneurial ecosystems have become very prominent over the last decade, and the current thinking can be seen as a result of developments in several related literatures and practices, such as context, high-growth entrepreneurship, clusters, regional innovation systems, entrepreneurial environments, business ecosystems, and institutions [19]. Whilst universities align with much of this literature and practice, they particularly align with an institutional perspective in that they play a significant institutional role in reducing unproductive entrepreneurship to productive and high-growth entrepreneurship [23]. Entrepreneurial ecosystems are combinations of social, political, economic, and cultural elements within a region that support the development and growth of innovative startups and encourage nascent entrepreneurs and other actors to take the risk of starting, funding, and otherwise assisting high-risk ventures [24].…”

“…Being argued as a "catalyst for the development of entrepreneurial ecosystems", universities have increasingly been making a greater contribution and significant impact on socioeconomic development [29]. Consequently, their traditional roles and missions have been further expanded, from teaching and researching, to also include entrepreneurship [23]. Embarking on the entrepreneurial paradigm, from purely an academic entity, an entrepreneurial university "actively seeks to innovate in how it goes about its business" to create "a substantial shift in organizational character" to become a "stand-up" institution essentially via embracing knowledge transformation, university-industry collaboration, and creating a unique space for enabling entrepreneurial opportunities [30].…”