IDEAS home Printed from https://ideas.repec.org/a/spr/rvmgts/v16y2022i1d10.1007_s11846-020-00435-8.html
   My bibliography  Save this article

Innovation and entrepreneurial ecosystems: fintech in the financial services industry

Author

Listed:
  • Alexander Berman

    (St. John’s University)

  • Marcelo Cano-Kollmann

    (Ohio University)

  • Ram Mudambi

    (Temple University)

Abstract

Technological change that arises outside an industry and is used within it affects entrepreneurship and entrepreneurial ecosystems, but remains understudied. In this project we assess the role of financial technology (fintech) innovation in the process of firm entry into the investment advisory sector, bearing in mind that the core of this innovation arises from technological development that is external to the industry. Our analysis of a sector of the U.S.-based financial services industry indicates that fintech innovation has contributed to a substantial increase in the rate of entrepreneurial entry into the industry. More importantly, we show that this innovation has an asymmetric effect on the firms in the industry, strengthening startups and smaller firms while increasing competitive pressure on larger incumbents. Our findings contribute to the literature by exemplifying that external technology shocks can change market structure by strengthening entrepreneurial ecosystems.

Suggested Citation

  • Alexander Berman & Marcelo Cano-Kollmann & Ram Mudambi, 2022. "Innovation and entrepreneurial ecosystems: fintech in the financial services industry," Review of Managerial Science, Springer, vol. 16(1), pages 45-64, January.
    • Handle: RePEc:spr:rvmgts:v:16:y:2022:i:1:d:10.1007_s11846-020-00435-8
    DOI: 10.1007/s11846-020-00435-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11846-020-00435-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s11846-020-00435-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marianne P. Bitler & Alicia M. Robb & John D. Wolken, 2001. "Financial services used by small businesses: evidence from the 1998 survey of small business finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 87(Apr), pages 183-205, April.
    2. João J. M. Ferreira & Cristina I. Fernandes & Sascha Kraus, 2019. "Entrepreneurship research: mapping intellectual structures and research trends," Review of Managerial Science, Springer, vol. 13(1), pages 181-205, February.
    3. Ben Spigel, 2017. "The Relational Organization of Entrepreneurial Ecosystems," Entrepreneurship Theory and Practice, , vol. 41(1), pages 49-72, January.
    4. Luis Garicano & Esteban Rossi-Hansberg, 2006. "The Knowledge Economy at the Turn of the Twentieth Century: The Emergence of Hierarchies," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 396-403, 04-05.
    5. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    6. Peretto, Pietro F, 1998. "Technological Change, Market Rivalry, and the Evolution of the Capitalist Engine of Growth," Journal of Economic Growth, Springer, vol. 3(1), pages 53-80, March.
    7. Acs,Zoltan J. & Carlsson,Bo & Karlsson,Charlie (ed.), 1999. "Entrepreneurship, Small and Medium-Sized Enterprises and the Macroeconomy," Cambridge Books, Cambridge University Press, number 9780521621052.
    8. Wolfgang Hora & Johanna Gast & Norbert Kailer & Andrea Rey-Marti & Alicia Mas-Tur, 2018. "David and Goliath: causes and effects of coopetition between start-ups and corporates," Review of Managerial Science, Springer, vol. 12(2), pages 411-439, March.
    9. Dave Valliere & Rein Peterson, 2009. "Entrepreneurship and economic growth: Evidence from emerging and developed countries," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(5-6), pages 459-480, September.
    10. Alexander Berman & Alba Marino & Ram Mudambi, 2020. "The global connectivity of regional innovation systems in Italy: a core–periphery perspective," Regional Studies, Taylor & Francis Journals, vol. 54(5), pages 677-691, May.
    11. Christine Blanka, 2019. "An individual-level perspective on intrapreneurship: a review and ways forward," Review of Managerial Science, Springer, vol. 13(5), pages 919-961, November.
    12. Rajshree Agarwal & Michael Gort, 2002. "Firm and Product Life Cycles and Firm Survival," American Economic Review, American Economic Association, vol. 92(2), pages 184-190, May.
    13. Schultz, T Paul, 1990. "Women's Changing Participation in the Labor Force: A World Perspective," Economic Development and Cultural Change, University of Chicago Press, vol. 38(3), pages 457-488, April.
    14. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    15. Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-653, September.
    16. Patricia Crifo & H. Sami, 2008. "Entrepreneurship turnover and endogenous returns to ability," Post-Print hal-00260797, HAL.
    17. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
    18. Zoltan J. Acs & Erik Stam & David B. Audretsch & Allan O’Connor, 2017. "The lineages of the entrepreneurial ecosystem approach," Small Business Economics, Springer, vol. 49(1), pages 1-10, June.
    19. Sven M. Laudien & Robin Pesch, 2019. "Understanding the influence of digitalization on service firm business model design: a qualitative-empirical analysis," Review of Managerial Science, Springer, vol. 13(3), pages 575-587, June.
    20. Sascha Kraus & Norat Roig-Tierno & Ricarda B. Bouncken, 2019. "Digital innovation and venturing: an introduction into the digitalization of entrepreneurship," Review of Managerial Science, Springer, vol. 13(3), pages 519-528, June.
    21. Carlsson, Bo & Audretsch, David B. & Acs, Zoltan J., 1994. "Flexible technology and plant size U.S. manufacturing and metalworking industries," International Journal of Industrial Organization, Elsevier, vol. 12(3), pages 359-372, September.
    22. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    23. Norat Roig‐Tierno & Sascha Kraus & Sonia Cruz, 2018. "The relation between coopetition and innovation/entrepreneurship," Review of Managerial Science, Springer, vol. 12(2), pages 379-383, March.
    24. Aldrich, Howard E., 2012. "The emergence of entrepreneurship as an academic field: A personal essay on institutional entrepreneurship," Research Policy, Elsevier, vol. 41(7), pages 1240-1248.
    25. O’Connell, John F. & Williams, George, 2005. "Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 259-272.
    26. Janna Alvedalen & Ron Boschma, 2017. "A critical review of entrepreneurial ecosystems research: towards a future research agenda," European Planning Studies, Taylor & Francis Journals, vol. 25(6), pages 887-903, June.
    27. Guillermo A. Calvo & Stanislaw Wellisz, 1980. "Technology, Entrepreneurs, and Firm Size," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(4), pages 663-677.
    28. Agarwal, Rajshree & Gort, Michael, 1996. "The Evolution of Markets and Entry, Exit and Survival of Firms," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 489-498, August.
    29. Douglas Holtz-Eakin & Chihwa Kao, 2003. "Entrepreneurship and Economic Growth: The Proof Is in the Productivity," Center for Policy Research Working Papers 50, Center for Policy Research, Maxwell School, Syracuse University.
    30. Schaffner, Julie Anderson, 1993. "Rising incomes and the shift from self-employment to firm-based production," Economics Letters, Elsevier, vol. 41(4), pages 435-440.
    31. Sjoerd Beugelsdijk & Ram Mudambi, 2013. "MNEs as border-crossing multi-location enterprises: The role of discontinuities in geographic space," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(5), pages 413-426, June.
    32. Fiona Sussan & Zoltan J. Acs, 2017. "The digital entrepreneurial ecosystem," Small Business Economics, Springer, vol. 49(1), pages 55-73, June.
    33. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
    34. Alexander Kücher & Stefan Mayr & Christine Mitter & Christine Duller & Birgit Feldbauer-Durstmüller, 2020. "Firm age dynamics and causes of corporate bankruptcy: age dependent explanations for business failure," Review of Managerial Science, Springer, vol. 14(3), pages 633-661, June.
    35. Carlsson, B, 1992. "Management of flexible manufacturing: An international comparison," Omega, Elsevier, vol. 20(1), pages 11-22, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Gordon & Aroean, Lukman & Ko, Wai Wai, 2023. "Service innovation in business ecosystem: The roles of shared goals, coopetition, and interfirm power," International Journal of Production Economics, Elsevier, vol. 255(C).
    2. Bar-El, Raphael, 2023. "Reframing innovation: A case of split personality," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 111-122.
    3. Soni, Gunjan & Kumar, Satish & Mahto, Raj V. & Mangla, Sachin K. & Mittal, M.L. & Lim, Weng Marc, 2022. "A decision-making framework for Industry 4.0 technology implementation: The case of FinTech and sustainable supply chain finance for SMEs," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    4. Miguel-Ángel Galindo-Martín & María-Soledad Castaño-Martínez & María-Teresa Méndez-Picazo, 2023. "Digitalization, entrepreneurship and competitiveness: an analysis from 19 European countries," Review of Managerial Science, Springer, vol. 17(5), pages 1809-1826, July.
    5. Berman, Alexander & Mudambi, Ram & Shoham, Amir, 2022. "Linguistic structures and innovation: A behavioral approach," Journal of International Management, Elsevier, vol. 28(4).
    6. Zhao, Xin & Xu, Yong & Vasa, László & Shahzad, Umer, 2023. "Entrepreneurial ecosystem and urban innovation: Contextual findings in the lens of sustainable development from China," Technological Forecasting and Social Change, Elsevier, vol. 191(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. André Stel & José Millán & Concepción Román, 2014. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Small Business Economics, Springer, vol. 43(4), pages 839-855, December.
    2. Ana Joana Fernandes & Joao J. Ferreira, 2022. "Entrepreneurial ecosystems and networks: a literature review and research agenda," Review of Managerial Science, Springer, vol. 16(1), pages 189-247, January.
    3. Ricarda B. Bouncken & Sascha Kraus, 2022. "Entrepreneurial ecosystems in an interconnected world: emergence, governance and digitalization," Review of Managerial Science, Springer, vol. 16(1), pages 1-14, January.
    4. Ying Song & Octavio Escobar & Unai Arzubiaga & Alfredo De Massis, 2022. "The digital transformation of a traditional market into an entrepreneurial ecosystem," Review of Managerial Science, Springer, vol. 16(1), pages 65-88, January.
    5. Abraham K. Song, 2019. "The Digital Entrepreneurial Ecosystem—a critique and reconfiguration," Small Business Economics, Springer, vol. 53(3), pages 569-590, October.
    6. Liu, Jiali & Zhou, Haibo & Chen, Feng & Yu, Jiang, 2022. "The coevolution of innovation ecosystems and the strategic growth paths of knowledge-intensive enterprises: The case of China’s integrated circuit design industry," Journal of Business Research, Elsevier, vol. 144(C), pages 428-439.
    7. Bessagnet, Arnauld & Crespo, Joan & Vicente, Jérôme, 2021. "Unraveling the multi-scalar and evolutionary forces of entrepreneurial ecosystems: A historical event analysis applied to IoT Valley," Technovation, Elsevier, vol. 108(C).
    8. Jianhong Zhang & Désirée Gorp & Henk Kievit, 2023. "Digital technology and national entrepreneurship: An ecosystem perspective," The Journal of Technology Transfer, Springer, vol. 48(3), pages 1077-1105, June.
    9. da Fonseca, André Luís A. & Chimenti, Paula & Campos, Roberta D., 2023. "‘Take my advice’: Entrepreneurial consumers and the ecosystemic logics of digital platforms," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    10. Zoltán J. Ács & Pontus Braunerhjelm & David B. Audretsch & Bo Carlsson, 2015. "The knowledge spillover theory of entrepreneurship," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 7, pages 129-144, Edward Elgar Publishing.
    11. Hugo Erken & Piet Donselaar & Roy Thurik, 2018. "Total factor productivity and the role of entrepreneurship," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1493-1521, December.
    12. Theodoraki, Christina & Dana, Léo-Paul & Caputo, Andrea, 2022. "Building sustainable entrepreneurial ecosystems: A holistic approach," Journal of Business Research, Elsevier, vol. 140(C), pages 346-360.
    13. Niccolò Ghio & Massimiliano Guerini & Cristina Rossi-Lamastra, 2019. "The creation of high-tech ventures in entrepreneurial ecosystems: exploring the interactions among university knowledge, cooperative banks, and individual attitudes," Small Business Economics, Springer, vol. 52(2), pages 523-543, February.
    14. Vera Catarina Rocha, 2012. "The entrepreneur in economic theory: from an invisible man toward a new research field," FEP Working Papers 459, Universidade do Porto, Faculdade de Economia do Porto.
    15. Yi Sun & Shihui Li & Rui Wang, 2023. "Fintech: from budding to explosion - an overview of the current state of research," Review of Managerial Science, Springer, vol. 17(3), pages 715-755, April.
    16. David B. Audretsch, 2021. "Have we oversold the Silicon Valley model of entrepreneurship?," Small Business Economics, Springer, vol. 56(2), pages 849-856, February.
    17. Walid A. Nakara & Karim Messeghem & Andry Ramaroson, 2021. "Innovation and entrepreneurship in a context of poverty: a multilevel approach," Small Business Economics, Springer, vol. 56(4), pages 1601-1617, April.
    18. Colin Donaldson, 2021. "Culture in the entrepreneurial ecosystem: a conceptual framing," International Entrepreneurship and Management Journal, Springer, vol. 17(1), pages 289-319, March.
    19. Venâncio, Ana & Picoto, Winnie & Pinto, Inês, 2023. "Time-to-unicorn and digital entrepreneurial ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    20. Daniel Sunghwan Cho & Paul Ryan & Giulio Buciuni, 2022. "Evolutionary entrepreneurial ecosystems: a research pathway," Small Business Economics, Springer, vol. 58(4), pages 1865-1883, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:rvmgts:v:16:y:2022:i:1:d:10.1007_s11846-020-00435-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.