Why do some entrepreneurial ecosystems successfully adjust amid adversity while others languish?
By integrating prospect theory into the entrepreneurial ecosystem literature and using a quasi-natural experimental design with a difference-in-difference-in-differences model, our theory and findings reveal that earthquakes reduce entrepreneurship in regions with high household savings, but increase entrepreneurship in regions with low savings, and these between-area differences increase over time. Reconceptualizing the meaning of savings from a resource into a key driver of loss aversion, we thus identify the surprising constraining influence of financial capital in times of adversity, yielding important implications for entrepreneurship research and policymakers.
Jiabin Zhang, a PhD candidate at Vrije University Amsterdam. His research examines the management challenges surrounding the creation and development of firms, spanning a wide range from the micro to macro levels. Before starting his PhD, he obtained his master’s degree from Peking University and his bachelor’s degree from Renmin University of China. He was also the General Manager and Founder of Beijing Dexianglong Commerce & Trade Co., Ltd.
Zhang, J., van Hugten, J. & Stam, W. Save for a rainy day? How regional household savings constrain entrepreneurship after a natural disaster. Small Bus Econ 64, 2013–2033 (2025). https://doi.org/10.1007/s11187-024-00973-5