DefinePK

Abstract

Entrepreneurial ecosystems have emerged as a critical framework for explaining how regions foster innovation and achieve long-term economic transformation. While prior research highlights the importance of ecosystem elements such as finance, networks, and institutions, the pathways through which these systems generate macroeconomic outcomes remain contested, particularly in relation to institutional and policy contexts. This study develops and tests a moderated mediation model linking entrepreneurial ecosystems, innovation capacity, and regional economic transformation, with regional models, policies, and clusters as moderators. Data was collected from 200 ecosystem stakeholders, including entrepreneurs, incubator managers, executives, and policymakers, and analyzed using structural equation modeling with bootstrapped moderated mediation techniques. Results indicate that ecosystem quality significantly enhances innovation capacity and directly contributes to regional transformation. However, the mediating role of innovation capacity was weaker than anticipated and became significant only under high levels of supportive policy and cluster frameworks. These findings advance theory by demonstrating that ecosystems exert both direct effects on regional development and conditional indirect effects through innovation, thereby integrating ecosystem, innovation, and institutional perspectives. Practically, the study underscores the need for policymakers to invest not only in ecosystem infrastructure and networks but also in inclusive and coherent policy frameworks that enable innovation to translate into economic impact. The paper concludes by identifying limitations of the cross-sectional design and outlining avenues for future research on longitudinal ecosystem dynamics and contextual heterogeneity.