Introduction
Literature review
An entrepreneurial ecosystem framework
Understanding entrepreneurial economies as complex systems
Entrepreneurial actors
Entrepreneurial connectors
Entrepreneurial resources providers
Entrepreneurial culture
Introducing political entrepreneurship to entrepreneurial ecosystem
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Hypothesis: Political entrepreneurship will moderate stakeholders’ perception about the quality of the entrepreneurial ecosystem.
The context of the transition economy
Data and method
Interviews and survey description
Variable | Description | Mean | St.dev | Min | Max |
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Productive entrepreneurship activity | There is a strong and growth-oriented entrepreneurship ecosystem (EE) in my region | 5.336 | 1.460 | 1 | 7 |
Entrepreneurship rate | There is a sufficient number of entrepreneurial actors in the EE | 4.876 | 1.589 | 1 | 7 |
Government support | There is a sufficient number of government entrepreneurship | 3.925 | 1.484 | 1 | 7 |
Venture capital | There is a sufficient private equity capital (angels, venture capital) | 3.643 | 1.477 | 1 | 7 |
University support | Universities support entrepreneurship in my region | 4.162 | 1.754 | 1 | 7 |
Media support | There is a sufficient support of independent mass media to entrepreneurship | 4.396 | 1.549 | 1 | 7 |
Debt capital | There is a sufficient availability of debt capital like banks or other credit | 4.267 | 1.524 | 1 | 7 |
Formal networks | There is a sufficient formal networks to support entrepreneurship EE | 4.000 | 1.341 | 1 | 7 |
Informal networks | There is a sufficient informal networks to entrepreneurship EE | 4.121 | 1.383 | 1 | 7 |
Stakeholders connectivity | There is a sufficient stakeholder collaboration for entrepreneurship | 4.013 | 1.529 | 1 | 7 |
Entrepreneurial culture | There is a strong entrepreneurship culture and orientation in my region | 4.725 | 1.514 | 1 | 7 |
Awareness of entrepreneurship | There is a strong awareness for entrepreneurship in my region | 4.683 | 1.542 | 1 | 7 |
Sustainability of ecosystem | There is a strong awareness for sustainability (healthy lifestyle, veganism, energy efficiency) | 4.535 | 1.508 | 1 | 7 |
Political entrepreneurship | There is a strong political entrepreneurship- privileged access by entrepreneurship to resources in the ecosystem with government informal support and collaboration (CPE index) | 4.292 | 1.766 | 1 | 7 |
Identifying entrepreneurial ecosystem elements
Index | Mean | SD | Median | Min | Max | Cronbach’s Alpha | Composite reliability Index |
---|---|---|---|---|---|---|---|
EA | 4.310 | 1.272 | 4.333 | 1 | 7 | 0.790 | 0.724 |
ECN | 3.856 | 1.205 | 4.000 | 1 | 7 | 0.860 | 0.836 |
ERP | 4.124 | 1.223 | 4.333 | 1 | 7 | 0.770 | 0.730 |
EC | 4.653 | 1.300 | 5.000 | 1 | 7 | 0.851 | 0.828 |
EE | 4.236 | 1.127 | 4.312 | 1 | 7 | – | – |
CPE | 4.292 | 1.766 | 4.050 | 1 | 7 | – | – |
Occupation | Average value | P – value | Decision | |
---|---|---|---|---|
Entrepreneur | Other- stakeholders | |||
Entrepreneurial actors index (EA) | 4.037 | 4.538 | 0.003 | Reject the null |
Entrepreneurial connectors index (ECN) | 3.722 | 3.966 | 0.136 | Fail to reject the null |
Entrepreneurial resource providers index (ERP) | 3.852 | 4.350 | 0.002 | Reject the null |
Entrepreneurial culture index (EC) | 4.531 | 4.754 | 0.211 | Fail to reject the null |
Corruption and political entrepreneurship index (CPE) | 4.298 | 4.382 | 0.065 | Fail to reject the null |
Entrepreneurial ecosystem quality index (EE) | 4.036 | 4.402 | 0.017 | Reject the null |
Region | Average value | P – value | Decision | |
---|---|---|---|---|
Bucharest | Cluj-Napoca | |||
Entrepreneurial actors index (EA) | 4.253 | 4.376 | 0.477 | Fail to reject the null |
Entrepreneurial connectors index (ECN) | 3.735 | 3.993 | 0.115 | Fail to reject the null |
Entrepreneurial resource providers index (ERP) | 4.078 | 4.176 | 0.552 | Fail to reject the null |
Entrepreneurial culture index (EC) | 4.408 | 4.931 | 0.002 | Reject the null |
Corruption and political entrepreneurship index (CPE) | 4.957 | 3.647 | 0.002 | Reject the null |
Entrepreneurial ecosystem quality index (EE) | 4.118 | 4.369 | 0.099 | Fail to reject the null at 10% |
Gender | Average value | P – value | Decision | |
---|---|---|---|---|
Male | Female | |||
Entrepreneurial actors index (EA) | 4.174 | 4.546 | 0.03 | Reject the null |
Entrepreneurial connectors index (ECN) | 3.723 | 4.084 | 0.027 | Reject the null |
Entrepreneurial resource providers index (ERP) | 3.993 | 4.350 | 0.033 | Reject the null |
Entrepreneurial culture index (EC) | 4.519 | 4.883 | 0.037 | Reject the null |
Corruption and political entrepreneurship index (CPE) | 4.391 | 4.263 | 0.526 | Fail to reject the null |
Entrepreneurial ecosystem quality index (EE) | 4.102 | 4.466 | 0.017 | Reject the null |
Simulation analysis and measuring entrepreneurial ecosystem
Model
Results
Quantitative results of the survey
Model | EE index | EE index |
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Specifications | (1) | (2) |
Constant | −0.919 ** (0.002) | 3.201 *** (p < 0.001) |
Productive entrepreneurship activity (EEP) | 0.526 *** (0.001) | – |
Male Female | Reference 0.279* (0.020) | Reference 0.269 (0.087) |
Bucharest city Cluj-Napoca city | Reference −0.049 (0.688) | Reference 0.326 * (0.035) |
Entrepreneur Other stakeholder | Reference 0.315 ** (0.008) | Reference 0.396 * (0.011) |
Equity capital | 0.098*** (0.03) | −0.043 (0.07) |
Debt capital | 0.112*** (0.02) | 0.252*** (0.07) |
Formal networks | 0.015 (0.03) | 0.0175 (0.09) |
Informal networks | 0.076*** (0.03) | 0.085*** (0.03) |
Culture | 0.222*** (0.03) | 0.291*** (0.08) |
Sustainable ecosystem Yes Sustainable ecosystem No | Reference 0.044 (0.293) | Reference 0.123 * (0.024) |
R2/Adjusted R2 | 46.58% / 45.32% | 18.4% / 6.68% |
Number of observations | 218 | 218 |
RMSE | 2.63 | 3.05 |
Interview results
A sensible difference in perception between the entrepreneurs and the rest of stakeholders should be noted, when we consider availability of resources to entrepreneurs.“There were many projects with EU money destined to educate entrepreneurial spirit and to create an entrepreneurial culture. In the last years, the population began to understand the important role of entrepreneurs for society. Tolerance of failure is still a problem in Romania. It is still a "disaster" if you fail…” (Interviewee 6)
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I1 explains “Local and national government unfortunately doesn’t help enough; there are some governmental programmes, but the bureaucracy is huge and usually money comes late, and so there are hidden costs that perturbed the initial business plans. There are incubators, some of them are functioning well, part of them were created because it was a ‘must’.
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I12 focuses on specific resource providers: “Apart the main money providers which are the banks, some others: e.g. business angels and venture capital are new comers on the scene, but they are not yet at a critical mass.”
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I13 states that “Public administration in Cluj-Napoca is welcoming and encouraging initiatives; and the regulatory environment is good, much better than elsewhere in Romania, especially in last 3–5 years under the new mayor, when political entrepreneurship starts disappearing in a city.
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I14 further adds “Local government understands that success and well-being of community are not dependent on local government alone, but also external finance and free competition without corrupt ties would be a facilitator of the ecosystem.
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I18 was harsh about the phenomenon in the country: “Late totalitarian system is to blame - parasites before, parasites now, and they move from one generation to the next in the same logic. This troubles me…. They “poison” business environment limiting natural growth for other more competitive entrepreneurs and making privileged share the “pie”. But even worse, their presence is generating corruption in the whole system – because corruption is like a virus: it exists latent in nature (in this case “human nature”) and when it meets favourable conditions it infects the body in no time, crippling badly an otherwise healthy and promising EE”. I18 continues “There are some notable exceptions in the northern territories of the continent, who have succeeded to build an efficient immune system”.
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Finally, I16 posits: “In terms of the policy environment, from my observation the mayor is open. He is open to dialogue, open to listening. He says he hates political entrepreneurship – people believe him. You could say that he has time on his side: Cluj is booming. The infrastructure is being improved rapidly and while corrupt practices still persist, new market opportunities take over”.
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I17 comments “There are business angel financing only eco-friendly business, and something more substantial companies would need to liaise with authorities”. This demonstrates that political entrepreneurship becomes an issue, once the returns to the project or the scope and size of the business project increases.
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I9 further adds “We have start-ups, developed start-ups, mature companies that want to get involved in community projects, but we need “ok” by authorities. These are unlikely to give us a green light unless they directly or indirectly benefit from the project”.
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I2 further comments “This was not the case a few years ago in our city. You would need to know someone from city administration to participate in a competition or win a grant. Moreover these policy-makers had their own companies. Public administration is now also active on international platforms, events, but not without the self-benefit.
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I15 also posits that “One of our biggest challenges to understand the degree of political entrepreneurship is the absence of data. Things are moving fast and hence it is hard to keep up. We encourage the philosophy of ‘make meaning, not money”.
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I18 also mentions some traits of a political entrepreneur: “About the typical actor of a post-communist country – the political entrepreneur – they envisage and envelop business opportunities with considerable added – value, even temporary; or to benefit from a temporary monopoly situation. They have usually a cynical attitude towards business: they do not “attach” themselves to a particular field –their dream is to accumulate, no matter how, fundamentally he is a “fake”.