DEVELOPING ENTREPRENEURIAL ECOYSTEMS: INTEGRATING SOCIAL EVOLUTIONARY THEORY AND SIGNALING THEORY TO EXPLAIN THE ROLE OF MEDIA IN ENTREPRENEURIAL ECOSYSTEMS

Entrepreneurship drives innovation, social change, and economic development locally, regionally, nationally, and worldwide (Konczal, 2013). The activities, relationships, and entities utilized to enhance entrepreneurial activity are just one important part of what scholars have termed the entrepreneurial ecosystem (EE), in acknowledgement of the interconnectedness of these factors with other market dimensions.

This dissertation integrates previous definitions of the EE and proposes a new definition that emphasizes the importance of the social environment and the role of communication for change and EE development. Building on evidence from diverse streams of research to further our understanding of entrepreneurial ecosystem activity, this dissertation argues that an overlooked explanation for EE change is social evolutionary theory (SET). Further, in exploring the mechanisms behind EE change, the dissertation explores the role of media signals on the pattern of firm formation and failure EEs. Doing so, the dissertation proposes a theoretical approach and model primarily based on SET (Margulis, 1971) and utilizes signaling theory (Spence, 1973) to address a gap in SET and thus explain how changes in EEs over time occur.

Using a sample of U.S. metropolitan statistical areas (MSAs) as EEs, data about media signals, industry diversity, resource availability, new venture formation, and firm failures over a ten year period were analyzed to test the formal model. Results support SET and signaling theory explanations for EEs but also offers some counterintuitive extensions of SET. This study contributes to literature on EEs by providing and testing a model of change specifying mechanisms that social actors use to coordinate entrepreneurship-related activities. The study also provides insights for policymakers and entrepreneurs in EEs about the importance of communication frequency and content for motivating potential entrepreneurs to pursue new ventures.