The Impact of Digital Governance on Entrepreneurial Activity in Relatively Poor Areas: Evidence from Tibet, China

Abstract

This paper examines the impact of digital governance on entrepreneurial activity in relatively poor areas from both theoretical and empirical perspectives. Our study is twofold. First, we utilize a economic geography model to theoretically analyze the influence of digital governance on regional entrepreneurial endeavors and develop research hypotheses. Second, using county panel data from Tibet spanning from 2001 to 2021, we empirically examine the influence of digital governance on entrepreneurial activity. The results show that digital governance can significantly increase regional entrepreneurial activity, and that the effect exhibits an upward and then a downward trend over time, with some spatial spillover effects. We argue that differences in regional network infrastructure are an important heterogeneity factor affecting digital governance’s ability to increase entrepreneurial activity. Our conclusions remain robust to various tests.