Sustainable development increasingly depends on the capacity of entrepreneurial ecosystems (EEs) to generate resilient, inclusive, and self-reinforcing entrepreneurial activity over time. While prior research has predominantly examined entrepreneurial ecosystems in developed economies, limited empirical evidence exists on how ecosystem components function in collectivist cultures and state-driven developing contexts such as Saudi Arabia. This study examines the influence of key entrepreneurial ecosystem elements on startup formation using a large-scale sample of 4032 Saudi entrepreneurs drawn from the Global Entrepreneurship Monitor (GEM), with a focus on human capital, social capital, and institutional support. The results indicate that human capital and social capital significantly increase the likelihood of startup formation, effectively doubling the chances of entrepreneurial action. In contrast, perceived formal institutional support is negatively associated with startup activity, whereas market dynamics and informal institutions show no statistically significant effects. These findings highlight the distinctive nature of Saudi Arabia’s state-driven and socially embedded entrepreneurial ecosystem under Vision 2030, where entrepreneurial activity is shaped more by individual capabilities and social networks than by formal institutional expansion. Adopting a sustainability-oriented entrepreneurial ecosystem perspective, the study demonstrates that sustainable entrepreneurial development in state-driven economies depends on aligning institutional reforms with underlying human and social capacities. The findings provide context-specific insights for policymakers by emphasising the importance of capability building, network formalisation, and culturally aligned regulatory reforms to foster resilient and sustainable entrepreneurship.
Nazneen et al. (Tue,) studied this question.