How do ecosystems drive prosperity? A multi-level model of entrepreneurial ecosystems and the performance of entrepreneurs and their ventures

Purpose A common tenet of entrepreneurship research and practice is that entrepreneurial ecosystems (EEs) drive the prosperity of geographic territories and local communities. EEs are believed to increase prosperity by influencing the performance of entrepreneurs and their ventures. However, the specific mechanisms and causal linkages that explain how EEs impact performance often remain unidentified and unstated. The purpose of this paper is to develop a multilevel model of EEs and performance. Design/methodology/approach Building on the ecosystem-as-structure and capabilities–opportunities–relevant exchanges performance frameworks, the proposed conceptual model explains how effective EEs improve entrepreneurial and venture performance. Findings The knowledge, networks and norms of EEs influence the performance capacity, opportunities and relevant exchanges of entrepreneurs (via their knowledge, skills, abilities and other characteristics, roles and relationships) and their ventures (via organizational capabilities, structure and transactions). The strength of the relationship between EEs and performance depends on the interplay between the agency of entrepreneurs (ecosystem mindset) and the structures of their ecosystems (ecosystem effectiveness). Originality/value This paper’s main insight is that effective EEs deliver a value proposition focused on improving entrepreneur and venture performance. The conceptual model generates important implications for entrepreneurs and ecosystem leaders about how to leverage EEs as catalysts for prosperity.