If entrepreneurial exits are all small, then limited wealth that is generated and managerial learning opportunities are truncated. Moreover, if such exits are seen as the norm then this limits ambition on the part of both subsequent entrepreneurs and also early stage investors.

The objective of ecosystem is to achieve goal by improving the environment that surrounds the firms, at the same time there is challenge from government intervention along with promotion support in the emergence of entrepreneurial ecosystems

https://www.oecd.org/cfe/leed/Entrepreneurial-ecosystems.pdf

Krishnan, Thank you very much for your contribution. I really appreciate your vision theory and practise. Best, Francesca.

I guess that literature on local productive arrangements may help you. You can also try to adapt the SSNIP test (common in antitrust analysis) to identify the geographic extension of markets affected by entrepreneurship. You must be aware that the boundaries of an entrepreneurial system change in time, in parallel to the spread of innovations and growth of firms.

As per the following HBR article, most entrepreneurs identify their top three challenges as follows: access to talent, excessive bureaucracy and raising capital in the early stages.

https://hbr.org/2014/05/what-an-entrepreneurial-ecosystem-actually-is

You could define the territorial limits with regard to the same challenge areas. For example:

What are the areas and industry segments from where the entrepreneur recruits talent, or loses talent to?

Which departments and government bodies draw up regulations, and monitor the entrepreneur?

What are the bodies- banks, financial companies, and other entities that the entrepreneur is likely to seek capital from? 

Which clients, competitors, suppliers and institutions are relevant to the entrepreneur for talent, resources, rules and regulations?

Rubens, thank you for your suggestion, there are really interesting. I agree with you, boundaries can change with socio-economic evolution.