Improving the Economic Impact of Startup Ecosystem in India: A Study Based on Entrepreneurial Ecosystem Theory

Abstract

Business incubators (BIs) provide a range of services and facilities aimed at nurturing the startups to grow successful business. Improving the economic impact of the startup ecosystem can be effected by investigating the potential role of business incubators. An extensive survey, on the startups, BIs, government officials, mentors, and funders pan India, is used to test a set of hypothesis based on the effect of BIs in influencing factors cited as research gaps in literature. Partial Least Squares SEM (PLS-SEM) approach was employed for data analysis and the path coefficients which quantify this effect are estimated. The results of data analysis show that while influence of business incubators on startup resources, government resources and incubator resources have a direct implication on the economic impact, money support and market connect indicate a negative impact. However, money support is found to have a strong influence as a mediating factor on all other factors. Applied with the interpretation of entrepreneurial ecosystem theory, study concludes that the money support factors need to employed with the scope of process theory rather than the resource theory perspective. The insights gained by the study is useful to improve the functions of BIs and the startup ecosystem.