Unintended Dependence Creation? The Nesting Effect of University Entrepreneurial Ecosystems

The academic literature delves into universities' support for innovation and entrepreneurship, covering aspects such as entrepreneurship education, technology transfer, and university spin-offs. Although the concept of university entrepreneurial ecosystems has emerged to investigate support and resources within an integrated framework, literature predominantly emphasizes the university perspectives, overlooking students' individual experiences and capabilities. Our study bridges this gap by employing the concept of multiple embeddedness and conducting case studies with student startups at a German public university to scrutinize how they succeeded or failed in leveraging resources available in both the university and regional entrepreneurial ecosystems. The findings reveal that the university entrepreneurial ecosystem may unintentionally foster students' dependence on university support, impeding student entrepreneurs from developing their embeddedness in the regional ecosystem. We theorize this as a "nesting effect" by identifying mechanisms through which students struggle to leverage resources from both the university and regional entrepreneurial ecosystems due to relational over-embeddedness. Additionally, we explore students' capabilities to dynamically adapt how they balance their embeddedness across multiple contexts during the venture development process. Finally, we outline policy considerations to address challenges posed by diverse structural embeddedness and emphasize the importance of regional embeddedness.