How does broadband infrastructure promote entrepreneurship in China: Evidence from a quasi-natural experiment

Using the Broadband China strategy as a quasi-natural experiment, our study attempts to un-derstand how broadband infrastructure (BI) impacts entrepreneurship in China. Employing a staggered difference-in-difference approach, we argue that BI significantly enhances entrepre-neurship, and that this conclusion holds after considering the identification of assumptions and a range of other factors that may interfere with the estimation results. The mechanism exploration reveals that human capital agglomeration and financial development are the main pathways through which BI encourages entrepreneurial activities. Furthermore, the positive effects of BI are bigger in eastern cities, high market-oriented cities, and among cities with excellent traditional infrastructure. Our findings reveal the role of improving BI in facilitating the development of new ventures in China.

Automated summary

This study examines the impact of broadband infrastructure on entrepreneurship in China using the Broadband China strategy as a quasi-natural experiment. The findings suggest that broadband infrastructure significantly enhances entrepreneurial activities, particularly through the mechanisms of human capital agglomeration and financial development. Moreover, the positive effects of broadband infrastructure are more pronounced in eastern cities, high market-oriented cities, and cities with excellent traditional infrastructure.