THE IMPACT OF DIGITAL TRANSFORMATION ON ENTREPRENEURIAL ACTIVITY. EMPIRICAL EVIDENCE FROM THE EUROPEAN UNION

Abstract

The paper explores the impact of digital transformation (DT) on new business creation in the case of European Union member states over the period 2015–2020 by employing several econometric techniques such as Ordinary Least Squares (OLS) and quantile regression (QR). The results of OLS regression indicate a positive and significant link between DT and entrepreneurial activity. However, the quantile regression results highlight a parameter heterogeneity in the effect of DT on entrepreneurial activity. Furthermore, the magnitude of the impact is greater at the higher size quantiles of the new business density distribution. Overall, the empirical findings highlight the key role of DT in developing public policies aimed to spur entrepreneurial activity. Thus, this paper brings significant contributions to the extant literature on the macro determinants of firm creation.