Digital infrastructure and urban entrepreneurship level

This article explores the pivotal role of digital infrastructure in fostering urban entrepreneurship amidst the current era of rapid digital economy expansion. By leveraging Tianyancha micro-enterprise data alongside city-level data spanning from 2005 to 2019, in our study, we elucidate how digital infrastructure serves as a vital catalyst for enhancing urban entrepreneurial activity. Our findings demonstrate that digital infrastructure significantly elevates the entrepreneurial landscape within urban settings. Through mechanism analysis, we reveal that digital infrastructure facilitates urban entrepreneurship by facilitating inclusive digital finance and broadening consumer markets. Moreover, our heterogeneity analysis underscores that cities with higher economic development, denser populations, and service-oriented industries – particularly non-productive service sectors – stand to gain the most from digital infrastructure advancements. Lastly, our extended analysis reveals a threshold effect wherein digital infrastructure reaches a critical point in its ability to spur urban entrepreneurship.