The Impact of Governments’ Digital Economy Procurement on Rural Household Entrepreneurship

Abstract

ABSTRACT Intangible digital technologies have advanced significantly over the past few decades. We examine the effects of government digital economy procurement programs on rural household entrepreneurship using data from the Chinese Household Finance Survey, China Grassroots Governance Survey, and Chinese government procurement data from 2015 to 2019. We find that the likelihood of rural household entrepreneurship is greatly increased by the government acquisition of products in the digital economy. Our mechanism analysis shows that government digital procurement could have an impact on rural household entrepreneurship by easing credit restrictions, encouraging the growth of distinctive industries, and improving government information disclosures. Furthermore, the effects of government procurement in the digital economy are particularly noticeable in counties characterized by e-commerce and industry integration. The paper offers insightful policy recommendations for the use of digital initiatives to support rural economic development in emerging economies.