Is a sustainable loop of economy and entrepreneurial ecosystem possible? a structural perspective
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Is a sustainable loop of economy and entrepreneurial ecosystem possible? a structural perspective Guo‑Hua Cao1 · Jing Zhang1 Received: 23 December 2019 / Accepted: 21 July 2020 © Springer Nature B.V. 2020
Abstract Is region-level entrepreneurial ecosystem valid in emerging markets? What is the mechanism between entrepreneurial ecosystem elements? Is region-level entrepreneurial ecosystem in emerging markets economic-promoting? An endogenous growth model with labor-preference technologic progress is introduced to interpret the interactions between entrepreneurial ecosystem layers and growth; besides, a panel vector auto-regression model based on Chinese provinces from 2002 to 2016 is used to test. Accordingly, we empirically prove the possibility of entrepreneurial ecosystem achieving sustainable development at the scope of Chinese provinces. However, several specific situations should be avoided, including (1) a too-low relative human capital return, (2) a too-low poor-conditions-led transaction efficiency, and (3) a too-low human-capital-stock-determined technology. Thus, shortterm tolerance and continuous promoting efforts are necessary. By doing so, we contribute to the literature of region-level entrepreneurial ecosystem and economic growth, or to say the fields of institutional economics, regional economics, and development economics. Keywords Economic growth · Entrepreneurial ecosystem · Panel vector auto-regression · Sustainable development · Two-period overlapping generation model
1 Introduction As the economic growth slows down since the 2008 Global Crisis, entrepreneurs have become one of the most important and active economic components in China, providing more than 40% of employment and around 30% of investment (Fig. 1). Thus, how to keep private capital active and sustainable becomes a critical issue for today’s China. The entrepreneurial ecosystem (EE) appears to be a solution, which has been proved effective worldwide (Galindo and Méndez 2014; Prieger et al. 2016). EE is a systemic approach, which advocates researching entrepreneurial activity as a behavior of entrepreneurs embedded * Jing Zhang [email protected] Guo‑Hua Cao [email protected] 1
School of Economics and Business Administration, Chongqing University, Chongqing 400030, China
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Fig. 1 Importance of private capital and self-employment in China. Data resource: The national bureau of statistics of China
within contexts (Acs et al. 2011), instead of treating entrepreneurial activity in isolation (Wright and Stigliani 2013). This approach combines the literature of regional development and strategic management (Acs et al. 2017), relates entrepreneurship to economic growth (Acs et al. 2018). The increasing interest in EE indicates an organized attempt to establish pro-entrepreneurship conditions for ne
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