The road to entrepreneurship: The effect of China's broadband infrastructure construction

Abstract

Reasonable assessments of the impact of information infrastructure construction on entrepreneurship will support the development of the digital economy in China. Using nationwide data from 2005 to 2017, this paper analyzes the causal effect of the “Broadband China” pilot policy on entrepreneurship based on a difference-in-differences approach. We find that information infrastructure construction significantly enhances entrepreneurship, which is robust under different settings. A mechanism exploration suggests that constructing information infrastructure benefits information acquisition, knowledge spillovers, and risk-taking behavior, which illustrate the internal mechanism of promoting entrepreneurship. Taken together, this paper supports the positive role of the digital economy in the promotion of entrepreneurship in addition to providing new insights into the construction of information infrastructure to support entrepreneurship.