To Bridge or Buffer? A Resource Dependence Theory of Nascent Entrepreneurial Ecosystems

Abstract

Vibrant entrepreneurial ecosystems – systems of inter-related forces that promote and sustain regional entrepreneurship – are increasingly viewed as sources of innovation, economic development, and community revitalization. Regions with emerging, underdeveloped, or depressed economies are attempting to develop their nascent entrepreneurial ecosystems in the hopes of experiencing the positive benefits of entrepreneurial activity. For nascent entrepreneurial ecosystems to grow requires resources. However, it is not clear how nascent entrepreneurial ecosystems manage their resource dependencies and the tensions that exist between creating and attracting resources. The purpose of this paper is to propose a theory of nascent entrepreneurial ecosystem resource dependence. This conceptual paper analyzes entrepreneurial ecosystems as meta-organizations and builds on resource dependence theory to explain how nascent ecosystems respond to environmental dependencies and their resource needs through internal and external strategies. We explore two specific strategies used by nascent entrepreneurial ecosystems to manage resource dependence – bridging and buffering. We propose a positive relationship between the resource dependence of a nascent entrepreneurial ecosystem and its use of bridging and buffering activities. We also identify two ecosystem characteristics that influence the pursuit of bridging and buffering: ecosystem size and the presence of collaborative values. In addition, we theorize that resource dependence strategies influence a key, system-level characteristic of entrepreneurial ecosystems: resilience, the ecosystem’s ability to respond and adapt to internal and external disruptions. The theory presented generates insights into how nascent entrepreneurial ecosystems create and obtain resources when ecosystems are unmunificent, resource-constrained, or underdeveloped. Our theorizing addresses which resource dependence strategy – buffering or bridging – has a stronger link to resource dependence (and resilience) and under what conditions these linkages occur. We generate insights for research on entrepreneurship in emerging and developed economies and produce practical implications for ecosystem participants, policy-makers, and economic development organizations.