The Finance Crowd Analysis Project is offering an unrivaled meta-scientific view in empirical Finance. 164 research teams worked on this project, an exceptional number in this field. It involved researchers from 207 institutions and 34 countries including central bank economists.

2 TBS Education associate professors involved in #fincap

Two TBS Education associate professors, Anna Calamia and Debrah Meloso, are co-authors of the research paper Non-standard-errors coming from Fincap. Anna and Debrah are professors in the department of Economics and Finance and are affiliated to the Finance, Economics, and Econometrics research laboratory at TBS Education. Their research has focused on the functioning of financial markets and they are engaged in several other projects together.

The first crowd-sourced empirical paper in Economics/Finance

Have you ever wondered whether researchers using the same data set to address a unique research question would come to the same conclusions? Fincap tried to answer this complex question.

This innovative project attracted eminent researchers, including some from the most prestigious French finance department. Fincap was run by project coordinators Anna Dreber, Felix Holzmeister, Juergen Huber, Magnus Johannesson, Michael Kirchler, Albert J. Menkveld, Sebastian Neusuess, Michael Razen, and Utz Weitzel from the Stockholm School of Economics, the University of Innsbruck, and the Vrije Universiteit Amsterdam.


In statistics, samples are drawn from a population in a data-generating process (DGP). Standard errors measure the uncertainty in sample estimates of population parameters. In science, evidence is generated to test hypotheses in an evidence-generating process (EGP). We claim that EGP variation across researchers adds uncertainty: non-standard errors. To study them, we let 164 teams test six hypotheses on the same sample. We find that non-standard errors are sizeable, on par with standard errors. Their size (i) co-varies only weakly with team merits, reproducibility, or peer rating, (ii) declines significantly after peer-feedback, and (iii) is underestimated by participants.

TBS Education’s Inspiring Guest project is in the spotlight for its innovative approach to teaching finance. After winning the Best Session Award at the AOM Teaching and Learning Conference and the Best Innovation Strategy Award from AMBA, it has been awarded the FMA Innovation in Teaching Award!

fma inspiring guest

2021 FMA Innovation in Teaching Award

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The Financial Management Association International‘s (FMA) Innovation in Teaching Award was created to recognize inspiring educators, improve the quality and relevance of education in finance and spread successful innovative practices. This international competition is open to any educator who teaches undergraduate or graduate students in finance.

The finalists are selected by a committee based on 3 criterias:

  • Innovation
  • Broad transferability of the teaching technique in terms of resources and instructor skills/connections
  • Measurable impact on students, institutions of higher education, and the finance profession

David Stolin, co-founder of TBS Education’s Inspiring Guest program with Elie Gray, received the 1st prize for their project “Teaching finance through short humorous videos made in collaboration with a comedian”.

Injecting humor into teaching finance

TBS Education is constantly exploring unconventional teaching methods, favoring pedagogical innovation for the benefit of its students. The Business School offers a wide range of technics to acquire knowledge and prepare for the business world. By offering an innovative approach to teaching, we capture students’ attention, make the content more memorable and develop their agility.

The first edition of Inspiring Guest project is developed around educational videos staring the Californian comedian Sammy Obeid. Not only the stand-up comedian is the host of “100 Humans” on Netflix but he is also a UC Berkeley Math & Business graduate.

The success of this first edition exceeded the expectations of the pedagogical team. Fully satisfied with the outcome, the Business School is currently preparing a new exciting edition of TBS Inspiring Guest.

Gilles Lafforgue has been appointed member of the Commission on the Economy of Sustainable Development (CEDD) of the French Ministry of Ecological Transition. The title of qualified personality for his economic expertise was awarded to him in this context. Very involved in the research sphere in terms of sustainable development and recognized for his economic expertise, this professor-researcher at TBS Education had participated in the French Carbon Commission from 2017 to 2019. His involvement and the recognition of his high skills are confirmed with this new appointment.

The role of the Commission on Sustainable Development Economics

The CEDD was created on November 10, 2020 at the initiative of the French Prime Minister and the French Minister of Ecological Transition. It succeeds the Economic Council for Sustainable Development. The CEDD provides assistance to French public decision-making on sustainable development from an economic perspective.

ministere de la transition ecologique svg

The mission of this consultative commission is to provide insight into the fields of the environment, energy and climate, transportation and housing. To do this, it relies on the analysis of statistical data and the comparison of economic analyses, the development and evaluation of public policies in these areas.

The objective of the “Environment” group

The professor-researcher will participate more specifically in the work of the “Environment” group, whose objective is to examine and discuss the economic accounts of the environment (monetary and physical flows relating to natural environments, natural resources, the circular economy, or the reduction of emissions and consumption).

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GDPR Compliance in Light of Heavier Sanctions to Come: at Least in Theory

[su_pullquote align=”right”]By W. Gregory Voss & Hugues Bouthinon-Dumas[/su_pullquote]

Ridiculously low ceilings on administrative fines hindered the effectiveness of EU data protection law for over twenty years. US tech giants may have seen these fines as a cost of doing business. Now, over two years after the commencement of the European Union’s widely heralded General Data Protection Regulation (GDPR), the anticipated billion-euro sanctions of EU Data Protection Authorities, or ‘DPAs’, which were to have changed the paradigm, have yet to be issued.

Newspaper tribunes and Twitter posts by activists, policymakers and consumers evidence a sense of unfulfilled expectations. DPA action has not supported the theoretical basis for GDPR sanctions—that of deterrence. However, the experience to date and reactions to it inspire recommendations for DPAs and companies alike.In our working paper, EU General Data Protection Regulation Sanctions in Theory and in Practice, forthcoming in Volume 37 of the Santa Clara High Technology Law Journal later in 2020, we explore the theoretical bases for GDPR sanctions and test the reality of DPA action against those bases. We use an analysis of the various functions of sanctions (confiscation, retribution, incapacitation etc) to determine that their main objective in the GDPR context is to act as a deterrent, inciting compliance.

To achieve deterrence, sanctions must be severe enough to dissuade. This has not been the case under the GDPR as shown through an examination of actual amount of the sanctions, which is paradoxical, given the substantial increase in the potential maximum fines under the GDPR. Sanctions prior to the GDPR, with certain exceptions, were generally capped at amounts under €1 million (eg £500,000 in the UK, €100,000 in Ireland, €300,000 in Germany and €105,000 in Sweden).

Since the GDPR has applied, sanctions have ranged from €28 for Google Ireland Limited in Hungary to €50 million for Google Inc in France, far below the potential maximum fine of 4% of turnover, or approximately €5.74 billion for Google Inc. based on 2019 turnover. While the highest sanctions under the GDPR have been substantially greater than those assessed under the prior legislation, they have been far from the maximum fines allowed under the GDPR.

Nonetheless, this failure of DPAs, especially the Irish DPA responsible for overseeing most of the US Tech Giants, has not gone unnoticed, as shown by EU institutional reports on the GDPR’s first two years. Indeed, increased funding of DPAs and greater use of cooperation and consistency mechanisms are called for, highlighting the DPAs’ current lack of means. Here, we underscore the fact that, in the area of data protection, there has been perhaps too much reliance on national regulators whereas in other fields (banking regulation, credit rating agencies etc), the European Union has tended to move toward centralization of enforcement.

Despite these short-fallings, the GDPR’s beefing-up of the enforcement toolbox has allowed for actions by non-profit organizations mandated by individuals (such as La Quadrature du Net that took action against tech giants after the GDPR came into force), making it easier for individuals to bring legal proceedings against violators in the future, and an EU Directive on representative actions for the protection of consumer collective interests is in the legislative pipeline.

On the side of businesses, there has been a lack of understanding of certain key provisions of the GDPR and, as compliance theorists tell us, certain firms may be overly conservative and tend to over-comply out of too great of a fear of sanction. This seems to be the case with the GDPR’s provisions regarding data breach notifications, where unnecessary notifications have overtaxed DPAs. The one-stop-shop mechanism, which is admittedly complex, also created misunderstanding.

This mechanism allows the DPA of the main establishment in the European Union of a non-EU company to become the lead supervisory authority in procedures involving that company, which potentially could lead to companies’ forum-shopping on this basis. However, there is also a requirement that the main establishment has decision-making power with respect to the data processing to which the procedure relates. Failure to consider the latter requirement could result in companies selecting main establishments in countries where there is not such decision-making power, and thereby halt attempts at forum-shopping for a lead supervisory authority for certain processing.  One example of this culminated in the French DPA (CNIL)’s largest fine so far, imposed on Google, whereas the latter argued that the Irish DPA was its lead supervisory authority.

As we explain in our paper, a lack of GDPR enforcement carries risks. Not only does it undercut the deterrent effect of the GDPR, but it also provides a tenuous basis for risk assessment by companies. While the GDPR’s first two years involved a sort of grace period when DPAs focused on educating companies and spent time painfully investigating complaints to litigation-proof their cases, some companies model their risk assessment of regulation based on enforcement histories. If there is a push for greater enforcement, which EU institutional reports would tend to foreshadow, the basis for companies’ models will be inaccurate. Furthermore, such dependence on risk evaluation ignores potential benefits to firms of increased trust and efficiency involved with expanding compliance to adopt a higher data protection compliance standard applied to customers worldwide.

Thus, we argue, not only should DPAs sanction offenders, but DPAs should sanction them severely when justified, establishing the necessary deterrence effect for EU data protection law. Moreover, DPA’s communication should in many cases be modified to stop downplaying sanctions: such communication is counterproductive to the desired effect of sanctions. Companies, on the other hand, should take efforts to understand fully the GDPR, and embrace compliance, leaving behind data protection forum-shopping as a potentially ineffective action. Furthermore, the typical securities lawyer warning that, ‘past performance is no guarantee of future results’, may be a forewarning to companies using past sanctions to create their compliance risk-assessment models that the results may not be accurate for the future.

Gregory Voss is an Associate Professor in the Human Resources Management & Business Law Department at TBS Education.

Hugues Bouthinon-Dumas is an Associate Professor in the Public and Private Policy Department at ESSEC Business School.

This article originally appeared on the Oxford Business Law Blog (OBLB) and is reproduced with permission and thanks.

Discover TBS professor Louise Curran’s point of view on the effect of COVID-19 on international trade policies.

As COVID-19 has spread across the world it has had major impacts on supply chains. It is reasonable to assume that the impact on trade flows may be even greater than that for the GFC in 2009, where world trade fell by over 20%. Most of this is an entirely natural result of the closure of many production structures around the world. However, some trade impacts are the direct result of trade policy interventions by governments, which presage a more major and long-term impact from the current crisis. Discover more in the video below:

[Série – Face à la crise Covid-19] How will Covid-19 impact international trade policies ? from FNEGE MEDIAS on Vimeo.

Discover TBS professor Timo Mandler’s point of view on building brands in markets that have reached the post-globalization stage.

Consumers in Western markets are increasingly critical towards globalization and re-embrace local values. Companies thus must decide whether to continue to pursue global branding strategies and/or rejuvenate local branding strategies. To explore the implications of market globalization for consumer preferences, we use signaling theory to investigate the role of perceived brand globalness and localness as signals of brand credibility, related downstream effects and boundary conditions, across two countries with differing levels of globalization. In globalized markets, brand globalness is a weaker signal of brand credibility than brand localness, whereas in globalizing markets, the two signals are of equal importance.

Building Credible Brands in (Post-)Globalizing Markets from FNEGE MEDIAS on Vimeo.

[su_pullquote align=”right”]By Denis Lacoste[/su_pullquote]Based on the article “La recherche dans les écoles de management apporte une réelle valeur ajoutée” – Published in News Tank.

While the relevance of research in business schools is now widely recognized, two criticisms resurface from time to time and cast doubt on this faculty activity.

The first criticism concerns the synergy between research and teaching. Detractors state that business schools, under the pressure of accreditations and rankings, pay consequent amounts to resident professors whose sole activity is to conduct research. The task of teaching is therefore left to non-research teachers, which implies that students don’t benefit from the skills of the most expert professors in their discipline.

The second criticism deals with the very nature of research. Academic journals select articles based on academic rigor. They don’t take into account their interest for practitioners. Students have no interest in joining a school whose research will be of no use to them.

In an article published last October 25th in News Tank, I show that these criticisms erroneously depict the state of research in business schools for at least three reasons.

First, rankings and accreditations don’t only take into consideration research performance, far from it. Consequently, business schools do not base their entire policy on this sole component: they evaluate teachers using many other criteria such as quality of teaching, innovation, engagement, institutional involvement, managerial responsibilities ….

Second, if the most active researchers have indeed lighter course loads (which is a common practice in higher education), it is wrong to say that students do not benefit from their skills. Many business schools have defined a minimum threshold for teaching hours, which cannot be crossed by any teacher, regardless of his/her research activity.

Finally, most of the research articles published in the best-ranked scientific journals have managerial implications and are selected with this criterion in mind. In addition, schools are increasingly aware of the impact of their professors’ research on stakeholders.

All in all, questioning research in business schools on the grounds that researchers do not teach and that research is not relevant does not hold up to serious scrutiny. On the contrary, over the past fifteen years, research in business schools has made remarkable progress both in terms of quantity and quality, and fully contributes to the schools’ success with students and companies !

Before giving fund managers credit for good work, check how much of it could have been done by a monkey.

Monkey Selfie David Slater

Photo: David Slater via Wikimedia Commons

Monkeys can surprise you. This photo of a crested black macaque is a selfie. Aside from photography, monkeys are reputed to be surprisingly good at picking stocks. In his now-classic 1973 book A Random Walk Down Wall Street, Princeton University professor Burton Malkiel wrote that “a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.” In recent years, research showed that monkeys (or, more precisely, randomly-generated stock portfolios) significantly outperform the stock market over the long run.

Monkey portfolios generally outperform the market

What may seem to be monkeys’ great handicap – their utter lack of interest in publicly traded companies – turns out to work to their advantage when it comes to portfolio formation. The stock market index represents companies in proportion to their size and is therefore dominated by large and fast-growing firms. By contrast, randomly selecting stocks into a portfolio tends to allocate more money to smaller and less glamorous companies, as well as breaking the link between portfolio weight and recent performance. Over extended periods, this blindness to company characteristics is rewarded with better investment returns. (While the reasons for this are subject to debate, overvaluation of in-vogue stocks seems to be one plausible explanation.)

Active managers exploit the “Monkey Effect”

If being oblivious to what’s going on in the market is what it takes to beat it, then you may not need a professional stock picker to manage your money. Or at the very least, you shouldn’t give investment managers credit for “the monkey effect” in their performance. This is the basic premise of our recent research paper.

Our approach is simple. On average, the performance of randomly chosen portfolios over the market index is similar to that of a portfolio where all stocks are weighted equally. We therefore study the correlation between the performance of active fund managers’ investment portfolios and the spread between equal-weighted and market-weighted portfolios’ performance. This can tell us how much of a fund’s performance could be replicated by mechanically tilting its portfolio toward an equal-weighted one. Of course, we also control for a range of other factors that have been known to impact investment returns.

Our results are striking. The equal-weight tilt is common among more than one thousand US mutual funds seeking to beat the S&P500 market index, and its extent is a key factor in explaining fund performance. On average, the size of the tilt is equivalent to investing 20 to 30% of a fund in an equal-weighted portfolio. Recognizing this fact in performance evaluation lowers the average fund’s risk-adjusted performance by as much as 0.7% percent per year.

Isolating the “Monkey Effect” in manager performance

Why might actively managed portfolios have a tilt toward equal weights? There are two possible explanations. One is that fund managers do this intentionally as they are aware that portfolios with random or equal weights generally outperform the market. Another is that this tilt is an unintended byproduct of their investment process (for example, the hit-and-miss nature of stock analysts’ recommendations could be analogous to throwing darts). Regardless of the underlying cause, an investor can acquire an equal-weight tilt much more cheaply than delegating the task to an expensive active manager – it is enough to combine a passively managed index fund (which can have fees of as little as 0.02% per year) with an equally-weighted one (with fees of as little as 0.2% per year).

After a series of legal and public-opinion battles, the credit for the monkey selfie was deemed to belong to the photographer; he did, after all, go to the trouble of travelling to the jungle, befriending the monkey, and setting up the camera – all necessary steps for us to enjoy the surprising photo. But when you come across surprisingly good performance by active fund managers, think twice whether they should get the credit (and the fees). Hint: they shouldn’t if a monkey could do it.


The authors evaluated the investment performance of actively managed U.S. mutual funds benchmarked against the S&P500 market index over the 1980-2009 period. They focused on the performance evaluation impact of including the spread between equal-weighted and market-value-weighted portfolios’ returns alongside established factors commonly used to assess fund performance. The article, titled “The equal-weight tilt in managed portfolios”, was published in Economics Letters in June 2019.

[su_pullquote align=”right”]By Secil Bayraktar[/su_pullquote]
Based on the article “How Leaders Cultivate Support for Change: Resource Creation through Justice and Job Security” – Published in Journal of Applied Behavioral Science in 2018.

Change is inevitable in the agenda of the 21st century. Consequently, organizations must adapt to the rapidly shifting business contexts through ongoing reorganizational practices to increase their effectiveness and stay competitive in the market. In this context, employees’ behavioral support is crucial for the success of change initiatives since it facilitates reaching strategic change objectives. On the other hand, lack of employee support usually is associated with failed change efforts.

Helping employees deal with the stress of change

Unsurprisingly, leaders have an essential role in creating behavioral support for change. Compared to senior managers, the immediate supervisors are more influential on employee attitudes and behavior during change since they have more direct contact with their team members. Research shows that the quality of the relationship between a supervisor and a subordinate influences employees’ behavioral support during organizational change.

Change is a stressful experience for employees. Many employees are unwilling to support the change because of feelings of anxiety, negative emotions, and uncertainty. In that context, employees need more resources than during stable times to cope with this stressful event, reduce strain, and increase positive reactions such as support for change. Moreover, during an organizational change, employees already face loss in their resources (e.g. increased workload, change of positions, or losing good coworker relationships) which in turn increases their stress and may lead to change-resistant behaviors. Under such circumstances, receiving sufficient resources from the supervisors is expected to help to reduce the stress, cope with change with more resources, and hence be more positive towards the change.

Two key resources to obtain employee support

In my recent study, I found that two resources, namely perceptions of procedural justice and job security, help employees to cope with the stress and uncertainty of the changing situation, to overcome their challenges, and subsequently to display supportive behaviors. Moreover, I found that leaders have a crucial role in building up such resources by establishing high-quality supervisor-subordinate relationships. These two types of resources are especially crucial during organizational change periods (i.e. context of uncertainty). First employees become more sensitive to justice related acts and fairness becomes particularly critical when a high level of uncertainty is experienced. Secondly, during change periods, substantial concerns about job insecurity persevere among employees.

The importance of justice and fairness

Leaders and their attitudes and behaviors are an important source of justice perceptions in the workplace. Employees who are treated in a fair manner tend to reciprocate by their favorable attitudes and behavior. When their leaders use fair procedures in allocating outcomes, their team members become more supportive of their goals and act in more cooperative ways. Procedural justice becomes even a more crucial resource under uncertain situations like change because employees are more sensitive to justice in the decision-making procedures and they expect more constantly applied, bias-free and ethical decisions in order to support the change. Moreover, fairness makes employees feel as valued members of the organization.

Value of clear communication throughout change process has been confirmed to increase the perception of fairness. In addition, managers also need to make sure that employee concerns are heard before making decisions. These decisions should be applied consistently across all affected employees, additional information should be provided about decisions when requested, and employees should be allowed to challenge the choices made by managers.

Make your employees feel safe

The second resource that leaders can generate is the perception of job security. Job insecurity refers to a sense of powerlessness and a subjectively perceived likelihood of involuntary job loss. Especially during an organizational change, job insecurity may constitute an important variable that is negatively related to behavioral support for change. On the other hand, when employees are equipped with the valuable resource of employment (i.e. perceptions of job security), they will be less likely to withdraw from their work, identify more with corporate objectives without the anxiety of a possible job loss, feel more powerful and acquire predictability over their future jobs. Consequently, they will be less likely to display change resistant behaviors and be more supportive.

Leaders are found to be influential in this subjective appraisal: high-quality relationships with the leader involving open communication, empowerment, support, assurance, and trust may play a role in increasing the controllability, predictability, and perceptions of security. In addition, individuals who have high quality relationships with their supervisors may receive updated and transparent information about the ongoing changes and may feel more certain as to whether they will keep their jobs. Such high-quality relationships with the supervisor may create a supportive workplace which makes the employees feel less threatened by the uncertainty. For those reasons, leaders provide an important job resource for employees to reduce the threat to their future jobs, which in turn leads to better coping with the uncertainty of change.

Transparency is key

On the other hand, there may be times in which managers may not guarantee job security in the future. Some types of changes (e.g. restructuring, downsizing, mergers) by their nature involve the reality that some people will lose their jobs, by either being laid off or being reassigned to new positions. Even in such cases, it is crucial that managers act transparent and do not lie and demolish trust. Moreover, when job elimination may be a reality, managers can use certain levers to reduce the adverse effects of such an environment by, for example, discussing the personal situation of each employee and planning the steps ahead with them. Although the current environment may not promise job security, organizations may offer re-employment counseling or outplacement assistance services to dismissed employees to increase their likelihood of future employability.

Given the significance of organizational change in today’s business context, it is vital to understand how to successfully manage change. Managers who want to increase their employees’ behavioral support for change need to consider providing them with certain resources to help them cope with change. This study demonstrates the positive role that leaders can play in the success of change initiatives by providing the right set of resources that employees need during the organizational change process. Justice and job security are two of these critical resources. Therefore, it is suggested that managers create the perception that processes are conducted in a fair manner and that the employees feel secure about their jobs. In other words, a climate of justice and security would help employees to be more supportive and thus less resistant to ongoing changes.


In this study, a survey was conducted with 269 employees and their supervisors from 30 organizations going through a significant change process. Examples of types of changes that the organizations were going through included mergers and acquisitions, restructuring, downsizing, CEO change, sector change, ERP system change, new markets, and new processes. All organizations were private companies in a variety of industries, including electronics, information technologies, food, finance, health, logistics, manufacturing, and media. The majority of the organizations were mid-sized firms in Turkey.

[su_pullquote align=”right”]By Christina Theodoraki[/su_pullquote]
Based on the article “A social capital approach to the development of sustainable entrepreneurial ecosystems: an explorative study” published in Small Business Economics, 51(1), 153-170.

The creation of sustainable entrepreneurial ecosystems is at the heart of public policy concerns. This type of ecosystem is composed of interconnected actors, within a territory, committed to facilitating the creation of new sustainable businesses. In this context, many questions need to be asked: Is it possible to replicate Silicon Valley’s success? Should governments continue to ‘infuse’ the ecosystem eternally with financial endowments or can the ecosystem reach a maturity threshold that allowed it to self-finance itself to evolve? What action plan must be considered to reach this maturity threshold? The social capital perspective is an interesting integrative framework that deserves to be analyzed to answer these questions.

The context and its evolution

The evolution of the entrepreneurial environment reinforces these questions. The economic crisis, the decline in public funding, the increase in the number of actors who revolve around the entrepreneur, competition between public, semi-public and private actors, the emergence of new entrants are new factors that threaten the survival of existing actors and force them to review their economic model or their contribution to the proper functioning of the ecosystem.

Thus, the university is one of the historical and founding actors of entrepreneurial ecosystems. The contribution of universities to the sustainability of the entrepreneurial ecosystem is important. They contribute to the creation of knowledge that they transfer to students in order to prepare them to integrate the entrepreneurial ecosystem. In parallel, the establishment of academic incubators promotes technology transfer, commercialization and value creation through the creation of spin-offs and young innovative companies. These incubators are intermediate actors who build the bridge between the supported companies and their external environment. Their objective is “to act as a neutral coordinator to promote the interests of academic entrepreneurs, remove barriers to their success, and connect them to entrepreneurship support mechanisms both inside and outside the university” (Hayter 2016, p. 651-652).

However, even if the role and contribution of some actors in the ecosystem seems obvious, current research fails to explain why some ecosystems are more “sustainable” than others. The synthesis of studies in this field distinguishes three characteristics to promote a sustainable ecosystem: (i) the consideration of territorial specificities; (ii) the effect of a supportive entrepreneurial culture; and (iii) the continuous interaction and interdependence of its components. The social capital perspective represents the configuration of a sustainable entrepreneurial ecosystem.

The key role of social capital

Social capital is composed of tangible and intangible elements grouped into three dimensions: the structural one, the cognitive one and the relational one (see figure 1). The structural dimension describes the properties of the ecosystem (the number of ties between members, the configuration of these ties and their stability); the cognitive dimension refers to the shared culture within the ecosystem (shared goals and language, shared narratives); the relational dimension refers to the behavior of members (the norms to be respected, the members’ obligations, the identification of each member – who does what -, and the trust they build between them). Combining these dimensions promotes the optimal configuration of the ecosystem and contributes to its sustainability.

We can therefore assume that if we have devoted resources to structuring the ecosystem, creating a shared culture and languages, and fostering stakeholder relationships with norms and obligations of members, our ecosystem will be sustainable. Unfortunately, it is not enough to only build the structural, cognitive and relational dimensions of the ecosystem. These dimensions are interconnected, and their interactions promote the adaptation of the ecosystem to the specificities of each territory and each ecosystem.

The key ingredient for the well-functioning of the ecosystem is to consider the interactions of its dimensions. It is important to build bridges between these dimensions to promote exchanges and the interconnectivity of the elements. It is this interconnectivity that is the key to the success of a sustainable entrepreneurial ecosystem.

Figure 1: The Social Capital Perspective of the Entrepreneurial Ecosystem

Figure 1: The Social Capital Perspective of the Entrepreneurial Ecosystem

Source: Theodoraki et al., 2018, p.163

Managerial applications in different contexts

This study provides a better understanding of the composition of the entrepreneurial ecosystem and proposes a framework (through the social capital perspective) for configuring a sustainable ecosystem. Despite the focus of this study on academic incubators, our results are applicable in different sectors and contexts. In order to build a sustainable entrepreneurial ecosystem, it is advisable to: 1) create dense and strong relationships between members to compensate for the scarcity of resources; 2) develop a common culture and values within the ecosystem to ensure solidarity among members; 3) develop trust and rules respected by members to strengthen a climate of security conducive to value co-construction; 4) create bridges between mechanisms to fluidize and make flexible the evolution of the ecosystem.


The qualitative method using multiple case studies was conducted in Montpellier between 2013 and 2014 on 3 academic incubators. The choice of these incubators met four selection criteria: (i) proximity and commitment to an academic university, (ii) access to university services, (iii) transfer of scientific knowledge and support for the creation of new innovative businesses, (iv) geographical area. In total, we conducted 48 semi-directive interviews with all members of the entrepreneurial ecosystem (incubator managers, staff, incubatees, academic partners, funding entities, other types of incubators, etc.). This collection of ecosystem data with various groups of stakeholders allowed us to have a holistic view of the observed phenomenon, to cross-reference different points of view and to generate results by triangulation. The interviews were conducted using an interview guide, recorded, transcribed and coded to provide a synthesis of the results.
Co-authored by Christina Theodoraki (Professor, TBS Education), Karim Messeghem (Professor, University of Montpellier, co-director of the Jacques Cœur Chair at Labex Entreprendre), and Marc P. Rice (Provost at Babson College).