The T-Rex Effect in the Entrepreneurial Ecosystem

Large incumbent firms can profoundly shape the economic and institutional structures of the cities in which they operate. In highly attractive and advanced urban environments such as smart cities, the concentration of large firms may alter the configuration of entrepreneurial ecosystems by redistributing key resources, opportunities, and institutional dynamics. Building on the entrepreneurial ecosystem framework, this study introduces the concept of the T-Rex effect, conceptualizing large incumbent firms as dominant actors capable of reshaping ecosystem dynamics. Using a longitudinal panel of 42 Italian cities over a 15-year period and employing a dynamic Generalized Method of Moments (GMM) approach, the analysis investigates how the presence of large firms influences multiple dimensions of the entrepreneurial ecosystem. The findings suggest that while corporate concentration strengthens knowledge flows, talent attraction, and infrastructural resources, it is also associated with lower entrepreneurial activity and weaker liveability and informal institutional dynamics. These results highlight the T-Rex effect, whereby dominant corporate actors simultaneously generate ecosystem spillovers while altering the internal equilibrium of entrepreneurial ecosystems in smart cities