TLDR:
Assistant Professor Lei Xu’s research explores the conditions that can foster entrepreneurship and innovation in entrepreneurial ecosystems. His recent findings challenge the common belief that more venture capital inflows lead to a thriving entrepreneurial ecosystem. Xu and his collaborators discovered an inverted U-shaped relationship between venture capital investment inflows and new venture creation in the United States between 1994 and 2016. They highlight the importance of socio-cognitive forces and social interactions within the entrepreneurial ecosystem in driving new venture creation.
Article Summary:
Assistant Professor Lei Xu and his colleagues conducted research on the impact of venture capital on new venture creation in entrepreneurial ecosystems. They found that while venture capital is often seen as essential for entrepreneurship, excessive inflows can actually hinder regional entrepreneurship. Their study revealed the need for a tailored approach by policymakers to maximize the effectiveness of entrepreneurship-stimulating initiatives. Xu’s research emphasizes the importance of socio-cultural factors and social interactions in fostering innovation and new venture creation. He plans to further explore the origins of entrepreneurial ecosystems to provide valuable guidance for policymakers.
