The Relevance of Quantity and Quality Entrepreneurship for Regional Performance: The Moderating Role of the Entrepreneurial Ecosystem

Abstract

This study analyses how the entrepreneurial ecosystem and different types of entrepreneurship — i.e., quantity (Kirznerian) and quality (Schumpeterian) entrepreneurship — impact regional performance, in terms of gross value added per worker and employment growth. By analysing 121 European Union regions between 2012 and 2014, we find that an enhanced entrepreneurial ecosystem yields to superior regional performance. The results reveal a heterogeneous effect of quantity- and quality-based entrepreneurship on regional performance: quantity (Kirznerian) entrepreneurship negatively impacts regional performance, while this effect turns positive in case of quality (Schumpeterian) entrepreneurship. The findings also suggest that regions with a healthy entrepreneurial ecosystem have a greater capacity to materialize the effects of high regional business formation rates, regardless of their quality level (Kirznerian entrepreneurship), while regions with weak entrepreneurial ecosystem may rely on Schumpeterian entrepreneurs — who channel new and more innovative resources to the economy — to compensate the absence of entrepreneurship policy-support instruments and increase their economic outcomes.