The impact of an entrepreneurial ecosystem on student entrepreneurship financing: a signaling perspective

Extant research in entrepreneurship reveals that financial resource acquisition for student entrepreneurs is constrained by several factors including a lack of experience, domain expertise and underdeveloped social networks. What follows are accentuated risks of failure that can discourage students from entering the entrepreneurial career pathway. To attenuate resource shortcomings and information asymmetries, student entrepreneurs can signal their underlying qualities to other entrepreneurial actors through informational cues. These signals are embedded in the norms and rules of a specific context; however, much of the research related to signals has been devoid of contextual understanding. Building on the notion that signals do not operate in a vacuum, our attention in the present work is directed from an entrepreneurial ecosystem perspective and the impact this specific context can have on signal generation and interpretation. We build our contribution by extending signaling theory via a multiple case study of eight student entrepreneurs operating in an emerging privately governed entrepreneurial ecosystem located in Valencia, Spain. We contextualize four pathways that students followed towards entrepreneurial financing, creating four student entrepreneur profiles. Several useful contributions to the study of student entrepreneurship, signaling theory, and entrepreneurial ecosystem theory are made.