This paper delves into the theoretical underpinnings of how entrepreneurial ecosystems (EE) foster sustainable development (SD) through a system dynamics approach. Building on prior research, we integrate entrepreneurship context and societal outcomes, institutional fields, and development theories to elucidate the dynamic interactions between EE and SD. Our theoretical framework emphasizes the importance of contextualizing EE and SD, considering the intertwined business, social, geographical, historical, and institutional dimensions. This research highlights the critical role of institutional fields in shaping entrepreneurial opportunities and societal outcomes, providing a nuanced understanding of the mechanisms through which entrepreneurship contributes to addressing grand challenges.
