The effect of information communication technology on entrepreneurship: Evidence from rural China

As entrepreneurial dynamism is widely recognized as a driver of innovation and economic growth, it is important to understand the determinants of entrepreneurship. However, there is little literature examining the role of ICT and its potential mechanisms of individual entrepreneurship in rural China. This study investigates the effect of ICT utilization on entrepreneurship and its potential mechanisms by using China Family Panel Studies (CFPS) data from 2014 to 2020. We identify Internet use via computers, Internet use via mobile devices, and Internet use by computer or mobile devices as proxy variables for ICT utilization. Our empirical results indicate that ICT utilization has a significant and positive effect on entrepreneurship in rural China. The results remain robust after a series of robustness tests. This study also finds that the effect is heterogeneous by gender, generation, educational background, and regions. Furthermore, mechanism analysis shows that the Internet can promote entrepreneurship by facilitating access to information and the formation of social capital. The above finding in rural China will have important implications for economic development and poverty reduction in other developing countries.