A Systematic Approach for Developing the Startup Ecosystem in the MENA Region: Empirical Evidence from Lebanon, Jordan, Egypt and Turkey

Entrepreneurship is a critical driver of economic growth, with entrepreneurial ecosystems increasingly recognized as essential for fostering business creation and development. Despite the growing interest in ecosystems as an approach for understanding the context of entrepreneurship at the macro level, the “startup ecosystems” concept, which plays a crucial role in shaping regional economic landscapes, remains loosely defined and measured, particularly within the MENA region. This study adopts a systematic perspective, employing the PESTEL (Political, Economic, Social, Technological, Environmental, and Legal) framework to evaluate macro-environmental factors influencing the development of the entrepreneurial ecosystem measured through the “Score of Business” in Lebanon, Jordan, Egypt, and Turkey. This study suggests that factors like human capital, access to finance, innovation, access to infrastructure, governance, and technology can be assessed as components of the start-up ecosystem in the context of the selected MENA countries. Using panel data spanning 2004–2020, the analysis incorporates seven datasets, using the World Bank and other international institutions reports, controlled by three main variables- Foreign Direct Investment (FDI), Gross Domestic Product (GDP), and population growth. The data were compiled and analyzed using the Stata 15 software. Findings reveal that access to credit and use of the internet positively influence the “Score of Business” while human capital development and FDI exert a negative impact. Other factors, such as GDP growth, governance, population, and access to electricity in rural areas, demonstrate context-dependent effects. Finally, this study offers insights for policymakers and governments aiming to strengthen regional entrepreneurial ecosystems.