Operationalising relational theory of entrepreneurial ecosystems at city-level in Africa, Asia and the Middle East

Abstract

Relational theory has been a key advancement in understanding how entrepreneurial ecosystems work. However, the theory has not yet been operationalised through measurement methodologies. This study proposes an indicator-based framework and composite index methodology which builds on relational ecosystem theory. Starting from the premise that common aggregation methods like the arithmetic mean fail to convey the interdependence of ecosystem components (such as complementarity vs. substitution), this study explores the potential of geometric mean as an alternative approach. Our analysis shows that geometric mean methods render more plausible results than simple arithmetic mean; they operationalise complementarity between components more directly by introducing heftier penalties for imbalances in the ecosystem. Additionally, our methodology identifies the less-explored city-level as the most meaningful unit of analysis of entrepreneurial ecosystems. To test the index, we use a unique set of quantitative data for eleven middle-income cities, namely Accra, Amman, Bangkok, Beirut, Bengaluru, Cairo, Jakarta, Manila, Nairobi, Rabat, and Tunis. As most previously conducted measurements have targeted either mature or country ecosystems, our goal is not limited to methodological advancements in measuring entrepreneurial ecosystems, but it also relates to expanding the current status of research to less explored world regions.