Internet development and entrepreneurship

Jia Guo*, Zhiming Cheng, Ben Wang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)
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Abstract

We examine the relationship between Internet development and entrepreneurship in China, using survey data from the China Family Panel Studies on individual entrepreneurship and administrative data on new firm registration. Employing instrumental variable (IV) and difference-in-differences (DID) approaches to address the endogeneity of Internet development, we find that Internet development increases the likelihood of individual entrepreneurship and the number of new firm registrations. Our IV model suggests that a one standard deviation increase in the Internet development index increases the likelihood of becoming an entrepreneur by 0.588 standard deviations. Our DID model finds that the Broadband China Program – the inaugural national broadband infrastructure initiative – increases annual new firm registrations by 14,358 in the selected prefectures. These results are robust to a battery of robustness checks. We find that improved access to information and finance are the key mechanisms through which Internet development affects entrepreneurship.
Original languageEnglish
Article number102280
Pages (from-to)1-17
Number of pages17
JournalChina Economic Review
Volume88
DOIs
Publication statusPublished - Dec 2024

Bibliographical note

© 2024 The Authors. Published by Elsevier Inc. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

Keywords

  • Internet development
  • Entrepreneurship
  • China

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