Entrepreneurial Exit Dynamics and Innovation Renewal in Digital Innovation Ecosystems: Evidence from Global Entrepreneurship Data

Abstract

Entrepreneurial ecosystems are characterized by continuous cycles of firm creation and exit. In innovation-driven economies, business discontinuation does not necessarily represent failure; instead, it often facilitates knowledge diffusion and resource reallocation that support new entrepreneurial ventures. This study examines the relationship between business discontinuation and early-stage entrepreneurial activity using international data derived from the Global Entrepreneurship Monitor dataset covering the period 2019–2021. Using regression analysis, the results indicate a strong and statistically significant relationship between business discontinuation and entrepreneurial activity. The findings suggest that entrepreneurial exit contributes to innovation renewal within entrepreneurial ecosystems. By linking entrepreneurship dynamics with innovation systems and digital technology environments, the study contributes to interdisciplinary discussions on entrepreneurial dynamics relevant to innovation-driven industries.