Measuring the efficiency of an entrepreneurial ecosystem at municipality level: does institutional transparency play a moderating role?

Muhammad Faraz Riaz (), João Leitão and Uwe Cantner
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Muhammad Faraz Riaz: University of Jena

Eurasian Business Review, 2022, vol. 12, issue 1, No 6, 176 pages

Abstract: Abstract This study measures the output (start-ups) of an entrepreneurial ecosystem and estimates the moderating effect of institutional transparency on the relationship between entrepreneurial ecosystem and start-ups, applied to the context of Portuguese municipalities. Using factor analysis, a composite index of entrepreneurial ecosystem is constructed. The empirical results reveal that institutional transparency catalyzes the positive effect of entrepreneurial ecosystem index on the start-ups. Nevertheless, when the individual effects of entrepreneurial ecosystem’s elements on start-ups are analyzed, the composite index of institutional transparency reveals to be non-linearly related with the output of the entrepreneurial ecosystem, denoting a negative coefficient, in the linear form, and a positive coefficient, in the quadratic form. In addition, increases in financial and economic transparency and the transparency in urban planning deter the new business formation in a municipality, whereas the municipalities where public procurement is relatively transparent are found to be attracting more start-ups. Results also suggest that by increasing the transparency in public procurement, the government can raise the number of start-ups in a municipality. The empirical findings also corroborate the thesis that the presence of higher education institutions in a municipality help to attract more start-ups.

Keywords: Entrepreneurial ecosystem; Public procurement; Transparency; Start-ups (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s40821-021-00194-w

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