Investigating the Role of Blockchain Technology in Creating Decentralized Entrepreneurial Ecosystems and Transparent Financing Models

Abstract

Blockchain in Enabling Decentralized Entrepreneurial Ecosystems and Financing Transparency. The rise of blockchain technology has given rise to considerable hype and attention around how it can enable decentralized entrepreneurial ecosystems and financing. Both startups and small to medium enterprises (SMEs) have actively been exploring options beyond conventional financing methods to enhance trust, remove information asymmetry, and collaborate decentrally within ecosystem players. The present quantitative explanatory research was conducted to evaluate relationships between Blockchain Adoption (BA), Ecosystem Decentralization (ED), Financing Transparency (FT), and Entrepreneurial Ecosystem Performance (EEP). 320 samples consisting of startups, SME entrepreneurs, Venture Capital (VC) professionals, Blockchain Entrepreneurs, and Angel investors were selected for this study, using a structured questionnaire survey that uses a 5-point Likert-scale response format. SmartPLS 4 was used to conduct the analysis with Structural Equation Modeling (SEM). Results showed that BA had a significant effect on ED (β= 0.721, Ƥ<0.001) and FT (β= 0.684, Ƥ < 0.001). The study results also showed that ED (β=0.392, Ƥ < 0.001) and FT (β= 0.447, Ƥ < 0.001) have a significant positive effect on EEP. Further, mediation analysis supported that ecosystem decentralization (β=0.283, Ƥ <0.001) and financing transparency (β=0.306, Ƥ <0.001) are significant mediating variables in the link between blockchain adoption and entrepreneurial ecosystem performance. With strong measurement results, demonstrated by reliability (Cronbach's Alpha 0.874–0.916) and validity Average Variance Extracted (AVE) above 0.66 for all constructs (0.668–0.749) of data. In sum, blockchain technology enables the development of decentralized entrepreneurial ecosystems by supporting transparent financing, bolstering investor confidence, and stimulating entrepreneurial performance. Findings also add value to the literature on innovation and entrepreneurship and assist entrepreneurs, investors, and policymakers in forging a sustainable and inclusive financial ecosystem based on blockchain.