Place-Based Advantages in Entrepreneurship: How Entrepreneurial Ecosystem Coordination Reduces Transaction Costs

Abstract

Academics and practitioners are increasingly lauding the economic and community benefits of entrepreneurial ecosystems: the interrelated forces that promote and support entrepreneurship in geographic areas. Most researchers examining entrepreneurial ecosystems have sought to identify their core attributes rather than isolating the concrete mechanisms by which entrepreneurial ecosystems influence entrepreneurs. We address this omission in ecosystems research by theorizing about a specific set of economic forces through which ecosystems influence the entrepreneurship process: cost-reduction mechanisms. We integrate and extend insights from transaction cost economics and develop a framework for understanding the costreducing effects of ecosystems on entrepreneurial activities. We synthesize the fragmented research on entrepreneurial ecosystem coordination and theorize that as coordination increases three types of costssearch, negotiation, and enforcementdecrease, which improves ecosystem participants' ability to engage in entrepreneurship. Our theorizing contributes to research at the management and entrepreneurship interface and produces actionable insights for entrepreneurs and ecosystem builders.

The Effect of University Missions on Entrepreneurial Initiative across Multiple Entrepreneurial Ecosystems: Evidence from Europe

“…The multiple perspectives around evidenced spillover benefits on entrepreneurship are grounded on regional variations, nurturing interest in understanding how EEs components influence EI according to geographic delimitation [48]. Furthermore, acknowledging the inequality of opportunities around entrepreneurship has stressed the power of external forces [49], emphasizing the spatial concentration of entrepreneurial initiative.…”

Opportunity, necessity, and no one in the middle: A closer look at small, rural, and female‐led entrepreneurship in the United States

“…This result could also speak to the systematically less-developed context of rural regions. Roundy and Fayard (2020) noted that place-based factors should be emphasized when examining the mechanisms in which local entrepreneurial ecosystems affect entrepreneurs. That is, labor supply and demand factors, individuals, institutions, and values are all interrelated and all affect entrepreneurial choice.…”

A Transdisciplinary Spatial Approach to Creating a Vibrant Entrepreneurial Ecosystem for Regional Development

“…Dealmakers are players within the networks of an EE space with the role to "make connections from which knowledge spills over to lower costs of engaging in innovative activity, thus creating regional vibrancy" Feldman & Zoller, 2012, p.24 in [2]. The connection of said spatial network impact the vibrancy of EEs [11].…”

“…Considering vibrancy as the levels of entrepreneurial "activity" promoted by the coordination of the network or cooperation that represents the EE, a Vibrant EE (VEE) can be defined as "geographic areas that encourages and sustain high levels of entrepreneurial activity" [4] in [11], p.9. VEE thus is the collection and connection of isolated elements of EE operating in a location [12], [13] promoted by dealmakers [3], [12].…”