PurposeThe purpose of this research is to develop theory, thereby attending to the existing knowledge gap regarding the impact of family firms on entrepreneurial ecosystems (EEs). Reducing such a gap is both timely and relevant given the ubiquity of family firms across the globe and the lack of theoretical development at the intersection of EE and family firm literatures. By employing social capital theory in a propositional theorizing approach, this article presents unique propositions that enrich current understanding of the EE phenomenon.Design/methodology/approachOur method adopts a three-step propositional theorizing approach. The first step outlines our conceptualization, drawing on social capital theory and identifying multiple levels of analysis pertaining to EEs and family firms. The second step precisely identifies the constructs used for the theorization process, drawing upon relevant literature. The third step involves proposition building, which produces our findings.FindingsAs a result of our propositional theorizing method, we developed 10 theoretical propositions to explain interactions between family members, nonfamily entrepreneurs, family firms and new ventures in the EE, thereby focusing on the social elements of the EE and reducing its conceptual complexity while extending the explanatory power of family social capital in the EE.Research limitations/implicationsDespite being increasingly relevant in research, policy and practice discourse, EEs remain under theorized. By theorizing in this context, we provide explanations of the mechanisms to explain social interactions between family members, nonfamily entrepreneurs, family firms and new ventures and how such interactions are likely to provide better access to the untapped resources in the EE. Furthermore, our theorization also identifies underexplored research areas paving the way for future scholars.Practical implicationsThis article is relevant to practitioners and policymakers interested in creating balanced, inclusive and effective EE policies and interventions. Our theorization generates insights that complement a bottom-up approach where the state assumes a facilitating role for actors such as family firms to positively impact their EE. This research is both timely and necessary because, if unaddressed, it will lead to ineffective and potentially exclusionary policies and EE interventions.Originality/valueWe contribute to the literature by synthesizing the two domains and thereby advancing knowledge at the intersection of EE and family firm literatures. We strengthen the link between two burgeoning research areas through a propositional theorizing mode of theory development. Under the assumptions of a grand theory, social capital theory, we highlight the benefits that derive from social interactions in the EE between family firms and other EE actors.
