Dissecting the ecosystems’ determinants of entrepreneurial re-entry after a business failure

Espinoza-Benavides, Jorge, Guerrero, Maribel and Díaz, David (2021) Dissecting the ecosystems’ determinants of entrepreneurial re-entry after a business failure. European Business Review, 33 (6). pp. 975-998. ISSN 0955-534X

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Abstract

Purpose – This study aims to evaluate the role of entrepreneurial ecosystems conditions (formal, informal and social capital) on different types of entrepreneurial re-entry at a global scale.
Design/methodology/approach – Given this phenomenon’s nature, this study builds a panel of data of 54 economies covering different (advanced and emerging) countries across the globe during the period 2004– 2017 by mixing multiples sources of information (e.g. Global Entrepreneurship Monitor, the World Economic Forum, the World Bank and the International Monetary Fund). The statistical analysis consisted of the fixed effect dynamic generalized method of moments (GMM) estimation for panel data.
Findings – Three empirical insights emerge from the study. First, the entrepreneurial ecosystem’s formal conditions are mainly configured to support high-growth entrepreneurship ignoring re-entrepreneurs. Consequently, the formal conditions’ contribution is very limited in emerging economies. Second, the analysis of informal conditions revealed social media’s critical contribution for legitimizing entrepreneurship and supporting those entrepreneurs who want to re-enter the domestic or international market after a business failure. Third, social networks built during previous business angels or entrepreneurial experiences or with other entrepreneurs also play a crucial role for re-entrepreneurs to overcome the weaknesses in the entrepreneurial ecosystems’ conditions.
Originality/value – The study contributes to two ongoing academic debates among entrepreneurship scholars. The first is related to how the entrepreneurial ecosystem supports entrepreneurial activity in different economic contexts. The second is related to the study of the contextual determinants of entrepreneurial re-entry after a business failure.

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