Impact of youth entrepreneurship on local economic development: an approach based on statistical models

This study analyzes the role of youth entrepreneurship in fostering local economic development in the canton of La Maná, Ecuador. Adopting a quantitative, cross-sectional design, data were collected between January and February 2025 from 317 entrepreneurs aged 18–35 using a 40-item Likert-scale questionnaire structured across five dimensions. The instrument was validated by expert judgment and demonstrated strong internal consistency, with Cronbach’s alpha coefficients ranging from 0.72 to 0.92. Data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM). The measurement model was first assessed to confirm convergent and discriminant validity, followed by evaluation of the structural model through path coefficients, coefficient of determination (R²), and direct and indirect effects. Gender was incorporated as a control variable. The results indicate that institutional support exerts a significant negative effect on local economic development, suggesting a misalignment between existing public support mechanisms and the actual needs of young entrepreneurs. Conversely, local economic development plays a significant mediating role in enhancing economic outcomes, highlighting the importance of entrepreneurial networks and productive linkages in improving venture profitability and sustainability. The gender variable showed no significant direct effect, reflecting relatively equitable conditions within the local entrepreneurial ecosystem. Overall, the model demonstrated satisfactory reliability, validity, and explanatory power. This research contributes a robust empirical framework combining network-oriented perspectives with PLS-SEM analysis and underscores the importance of co-designing entrepreneurial support policies in collaboration with young entrepreneurs to improve their effectiveness and developmental impact.