The impact of digitalization on entrepreneurial activity and sustainable competitiveness: A panel data analysis

Abstract

Public and private stakeholders increasingly rely on digital technologies to foster entrepreneurial ecosystems while pursuing the goal of sustainable competitiveness, which entails ensuring economic, environmental, and social development. Recently, the emergence of the twin transitions concept portraying an incontestable complementarity between digital and green transitions has led to calls for further research. Few studies have however investigated the antecedents of nations’ sustainable competitiveness. The present study fills this gap in the literature and quantitatively evaluates the effect of digitalization on entrepreneurial activity and sustainable competitiveness. It uses annual secondary data for an unbalanced panel of 34 countries from 2015 to 2018. Incorporating digitalization as a major disruptive factor that shapes our current lives, the results show that it positively affects entrepreneurial activity and sustainable competitiveness and that entrepreneurial activities drive sustainable competitiveness. The facets of digitalization influence sustainable competitiveness to various degrees; where connectivity, Internet use, and digital integration appear to be the main components affecting it. Whereas digital skills and digital public services are less significant. The results offer theoretical and practical implications for governments and policymakers, who are encouraged to nurture the creation of new ventures, ensure widespread and reliable connectivity, increase Internet use, and push for greater digital integration.