A knowledge spillover narrative theory of entrepreneurship

Abstract This paper complements the knowledge spillover theory of entrepreneurship (KSTE) by introducing narratives as a vehicle to match people and places. While the KSTE explains that places differ in their economic activity by the key role played by new ventures in absorbing knowledge spillovers, the theory does not sufficiently address ‘how’ this leads to sustainable agglomeration effects. This paper complements the KSTE by introducing the spillover process of stories and narratives to attract people from outside, best described by a matching function of agents involved in all kinds of entrepreneurial activities—the knowledge spillover narrative theory of entrepreneurship (KSNTE). This refinement then explains agglomerations effects like entrepreneurial ecosystems induced by the stories and narratives told to match important people, solidifying the reputation of the location as ‘the-place-to-be’ for entrepreneurship.