The Relevance of Quantity and Quality Entrepreneurship for Regional Performance: The Moderating Role of the Entrepreneurial Ecosystem

Abstract

This study analyzes how the entrepreneurial ecosystem and different types of entrepreneurship impact regional performance. By analyzing 121 European Union regions between 2012 and 2014, it is found that quantity (Kirznerian) entrepreneurship negatively impacts regional performance, while this effect turns positive in the case of quality (Schumpeterian) entrepreneurship. Also, regions with a healthy entrepreneurial ecosystem have a greater capacity to materialize the effects of high business-formation rates, regardless of their quality (Kirznerian entrepreneurship), while regions with weak entrepreneurial ecosystem may rely on innovative (Schumpeterian) entrepreneurs to compensate for the absence of entrepreneurship support policies and increase their economic outcomes.

Entrepreneurial ecosystems in cities: The role of institutions

“…The role of institutions is exacerbated by two distinguished viewpoints on the evolution of entrepreneurial ecosystems—the top-down approach and the bottom-up approach in their management [ 10 ]. While the bottom-up approach assumes that ecosystems evolve like natural ecosystems, the mechanisms that facilitate this evolution are deeply embedded into the regulatory and cognitive framework of a place [ 24 ] and norms, culture, and attitudes towards entrepreneurship and the role of entrepreneurs in society. While this approach contrasts the classical theory in economics governed by an “invisible hand”, the institutional theory provides important answers on how culture, rules, norms, and behaviors shared by a specific group of individuals as informal institutions as well as formal regulation [ 39 ] spur a variety of entrepreneurship activities.…”

“…These are regulative, cognitive, and normative institutions that provide incentives for entrepreneurial behavior. Entrepreneurship scholars have drawn on an institutional framework to explain the role of changes in the institutional context at a country-level [ 17 , 18 ] and regional level [ 14 , 23 , 24 ] to explain what drives differences in entrepreneurial activity across various entrepreneurial and innovation ecosystems [ 9 , 41 – 44 ].…”

A manifesto for researching entrepreneurial ecosystems

“…Along with new data sources, researchers have been applying novel research methodologies to better understand entrepreneurial ecosystems. The bottleneck methodology, a statistical way to understand the relationship between different ecosystem elements and identify which attributes need the most development in order to improve overall scaling efforts, has been used by the EU to better understand the strengths and weaknesses of regional ecosystems (Szerb et al., 2014, 2018). New qualitative methods such as Qualitative Comparative Analysis (QCA) show great promise in helping to reveal the diversity of different types of ecosystems (Coduras et al., 2016).…”

Attitudes, Abilities and Aspirations in the Worldwide Entrepreneurship Ecosystem

“…Credit access was not significant to explain the response variables. Szerb et al (2019) studied the relevance of quantity and quality of entrepreneurship for regional performance through the moderating role of the entrepreneurial ecosystem. The researcher analyzed how the entrepreneurial ecosystem and different types of entrepreneurship impact local performance in 121 European regions for the period of 2012-2014.…”

“…The scientific community has been increasingly investigating the entrepreneurship phenomenon, aiming to get a better understanding of the concept, content and behavior (Lundström and Stevenson, 2005;Ahmad and Seymour, 2008;Acs et al, 2014;Ahamat and Chong, 2015;Mirzanti et al, 2015;Szerb et al, 2016;Catalin et al, 2017;Szerb et al, 2019). A variety of metrics and indicators for measuring entrepreneurship have been developed that allow analyzing its phenomenon in different perspectives including different approaches to the ecosystem.…”