Does the utilization of information communication technology promote entrepreneurship: Evidence from rural China

Abstract

Impacts on the probability of transition to entrepreneurship in rural China associated with the utilization of information communication technology (ICT) are estimated using longitudinal data from the China Family Panel Studies (CFPS) survey. We identify cell phone ownership and internet use as proxy variables for ICT utilization and find that cell phone ownership and internet use have positive impacts on entrepreneurship. After controlling for observables and time and regional fixed effects, cell phone users (internet users) are 2.0 (6.4) percentage points more likely to engage in entrepreneurship than the others. Considering that the average entrepreneurship rate for rural households is only 9.5% in the sample, the influence of cell phone ownership and internet use are very strong in the economic sense. Our results are robust to unobservable individual characteristics, model misspecification, and reverse causality of entrepreneurship to ICT utilization. Evidence also suggests that social network and information and knowledge acquisition play the mediating roles in the impact of ICT utilization on entrepreneurship.

Entrepreneurial entry: The role of social media

“…The CFPS covers 95% of the Chinese population in 25 provinces, providing extensive individual- and family-level economic and social life information. The data from CFPS has been validated and used for research in entrepreneurship ( Barnett et al., 2019 ) and other fields ( Hou et al., 2020 ; Sun et al., 2020 ).…”

“…A social network refers to a network of friends and acquaintances tied with formal and informal connections ( Barnett et al., 2019 ), that can exist both online and offline. Social media is useful for creating, expanding and managing networks.…”

“…Research also informs that social media use helps reinforce or maintain the strength of relationships among offline friends ( Thomas et al., 2020 ). Social media allows people to communicate with their offline friends instantly and conveniently without the need to be in geographical proximity ( Barnett et al., 2019 ). The opportunity to have a higher level of interaction at any time regardless of physical location offers social media users the ability to manage and enlarge their offline social network.…”

E-entrepreneurship in EU countries: evolutions and challenges

“…Other studies (Bandera, Collins, & Passerini, 2018;Cujia Berrio, Redondo, & Hernández, 2018;Barnett, Hu, & Wang, 2019) have found that the use of ICT has positive effects on entrepreneurs, is stimulating them and is moderating the relationship between entrepreneurial attitudes and risk. Moreover, the increase in information available due to new technologies positively affects aggregate entrepreneurship in national economies (Hanoteau & Rosa, 2019).…”

E-Entrepreneurship and Economic Development: the Case of EU Countries

“…An increasing number of researches (including Bandera, Collins, & Passerini, 2018;Cujia Berrio, Redondo, & Hernández, 2018;Barnett, Hu, & Wang, 2019;Hanoteau & Rosa, 2019) have argued for positive and significant influence of the adoption and implementation of ICTs on entrepreneurship. The Global Entrepreneurship Monitor also suggested that information technologies explain a large portion of the increase in opportunity motivated entrepreneurship, and a greater access to ICTs may encourage entrepreneurs to be more innovative (GEM, 2018).…”